Private Equity Firm Agrees to Acquire Majesco

Thoma Bravo — a private equity firm that has been active in the life insurance technology world before — said Monday that it has agreed to acquire Majesco for $594 million in cash and operate the company as a privately held company.

Majesco is a Morristown, New Jersey-based company that provides software and data storage services for insurers through the cloud.

The Players

Thoma Bravo is a Chicago-based investment firm that may be best known for owning J.D. Power and McAfee. It acquired iPipeline, a life insurance software and technology services firm, from three venture capital firms, in 2015, for $420 million, then sold iPipeline to Roper Technologies, in August 2019, for $1.6 billion.

Majesco has been a publicly traded company since 2015, with stock trading on Nasdaq, under the stock symbol MCJO.

Majesco has about 2,400 employees. It reported $3.6 million in net income for the latest quarter of its fiscal year, which ended March 31, on $38 million in revenue.

Majesco recently agreed to acquire InsPro, the company that offers the InsPro Enterprise marketing and policy administration system, for $12 million.

The Deal

Right before Thoma Bravo and Majesco announced their proposed deal, Majesco’s stock was trading for about $7 to $8 per share, giving the company a market capitalization level, or total stock value, of about $330 million.

The companies said Thoma Bravo will carry out the deal by paying Majesco shareholders $13.10 cash per share of common stock.

The price is about 74% over Majesco’s average closing stock price for the 30-day trading period ending July 17, the companies said.

Reasons

Elster said in a comment about the deal, which was included in the deal announcement, that one reason the company has agreed to the transaction is that managers believe that deal will deliver significant cash value to the stockholders.

Another reason is that operating as a private company should make the company more flexible, and help it focus on long-term investment and growth, Elster said.

A.J. Rohde, a partner at Thoma Bravo, said his firm sees Majesco as a leader in helping insurers move to the cloud faster, and modernize their internal and external facing systems.