$650 Million for Insurance Software Co

The private equity boys are at it again. This story in the NY Times today reminds us all how lousy the IPO market is and where the competition for deals is really heating up.

Applied systems, a private company that makes insurance software for agents, brokers and carriers is rumored to be acquired by Bain Capital. Applied systems is projected to be in the $65 million dollar range for revenues which has this deal valued at 10X revenues. Most deals I've heard about lately have been in the 8X range, although they were much smaller deals.

The interesting thing about these deals to me is how active the private equity guys are these days. A few of my sources in SF say they are extremely active in the sub $20 million dollar deals, which hardly ever make the press. Now, as the IPO market is weak, I suspect private equity buyouts will continue to be the trend.