Aug 13 (Reuters) - Israeli software provider Sapiens International said on Wednesday that it will be acquired by Advent International for $2.5 billion in cash, as the U.S. private equity firm zeros in on the insurance industry amid an AI boom.
The deal comes months after Advent entered exclusive negotiations to acquire Paris-based Kereis, the largest broker for housing protection insurance in France, from Bridgepoint.
AI-powered software applications are being used by insurers to reduce costs.
"Insurers are increasingly turning to technology to help unlock growth and profitability... We will work with the company (Sapiens) to accelerate investment into technology innovation, AI, and customer centricity," Douglas Hallstrom, a director at Advent, said in a statement.
Sapiens' shareholders will receive $43.50 per share in cash, a premium of about 47.5% over its last close of $29.50 on the Nasdaq on Tuesday.
It will become a privately held company after the deal closes, the company said.
Sapiens' existing shareholder Formula Systems will retain a minority stake in the company, it added.
"Formula will continue to retain ownership in Sapiens and is excited to partner with Advent to accelerate the transition to AI and SaaS (Software as a Service)," Guy Bernstein, CEO at Formula, said.
Earlier this month, Advent failed to acquire British scientific instruments maker Spectris after the latter decided against proceeding with the private equity firm's 4.8 billion pound ($6.48 billion) buyout proposal, days after backing rival suitor KKR's offer.
($1 = 0.7402 pounds)