Exclusive Report - Sources say Hellman & Friedman is exploring the sale of Applied Systems at a price of up to $10 billion.

Milana Vinn

Reuters New York, September 23 - According to people familiar with the matter, private equity firm Hellman & Friedman is exploring a sale of insurance software provider Applied Systems, which could value the company at up to 10 billion USD.

Sources said the private equity firm is working with investment bankers from JPMorgan JPM.N and Goldman Sachs GS.N to move forward with the deal, which has attracted interest from potential buyers. These sources, who requested anonymity due to the confidential nature of the matter, declined to be identified.

Applied Systems, Hellman & Friedman, JPMorgan, and Goldman Sachs all declined to comment.

Chicago-based Applied Systems provides software to help insurance agencies and brokerage firms manage customer relationships, policy administration, and other workflows. According to its website, its clients include insurance brokerage firms such as HUB International, Insurance Office of America, and Baldwin Group.

One of the sources said that Applied Systems' annual EBITDA exceeds 550 million USD.

In early 2014, Hellman & Friedman acquired Applied Systems from Bain Capital at a deal value of approximately 1.8 billion USD.

If this sale goes through, it would be one of the largest software M&A transactions this year and will test investors’ appetite for mature software assets—earlier this year, ServiceNow acquired cybersecurity provider Armis for 7.7 billion USD, and private equity firm Hg took financial software provider OneStream private in a 6.4 billion USD deal.

After a relatively quiet few months, software sector sales have seen an uptick in recent weeks, as more companies have started sales processes.

Earlier this month, Reuters reported that Thoma Bravo is exploring a sale of Foundation Software (link), Vista Equity Partners is considering selling banking software provider Finastra (link), while healthcare software company Waystar is also weighing strategic options including a sale (link), as investors look to capitalise on rising valuations.

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