In a deal announced Tuesday, Verisk Analytics confirmed that it was paying $650 million in cash for EagleView, a leading provider of aerial imagery and data analytics. It’s a huge deal — one of the biggest acquisitions in the region in the past 12 months.
This one kind of snuck right by us. In fact, I didn’t learn about the deal until a GeekWire reader pointed it out this afternoon via Twitter, saying he was surprised we hadn’t covered the news.
Bothell-based EagleView may not be a household name, and it certainly isn’t as sexy as Nest or Snapchat. But it has built a substantial business, compiling aerial imagery on 90 percent of the structures in the U.S.
It uses algorithms to analyze that imagery, providing robust reports on various structures, data that it sells to 24 of the 25 largest insurance companies in the country. Government agencies also use the company’s tools to digitally measure walls and roof surfaces, used for tax assessments, as do 30,000 construction companies and contractors, which use the service to estimate the cost of home repairs.
In addition, the reports can be used by companies to determine whether solar power installations are possible without the danger of an installer climbing onto a roof.
Founded in 2006, the company was doing “big data” before “big data” was cool. It was started by brothers-in-law Dave Carlson, a Southern California roofing contractor, and Chris Pershing, a software engineer in Seattle, who came up with the idea of using aerial photography to more accurately measure roofs. Last January, the company merged with Rochester, New York-based Pictometry International, a leader in geo-referenced aerial image capture and data analytics. The annual revenue of the combined company topped $100 million for 2012.
New Jersey-based Verisk — publicly-traded on Nasdaq with a market value of $10 billion — plans to use the acquisition of EagleView to roll out automated underwriting services, products that don’t currently exist on the market. Over time, it also plans to work on converting images into analytics.
“We believe we can build on the comprehensive coverage of EVT’s library to expand solutions to our customers, including underwriting and, over time, international solutions as well,” said Verisk CEO Scott Stephenson in a release. In a conference call with analysts this week, Stephenson said the beauty of EagleView model is that they retain ownership of the images, which means they can be “repurposed into other uses.”
Here’s the full press release on the news:
Verisk Analytics, Inc., a leading source of information about risk, today announced it has signed an agreement to acquire EagleView Technology Corporation (“EVT”), the parent company of Pictometry International Corp., and Eagle View Technologies, Inc. EVT is an acknowledged leader in the United States of geo-referenced aerial image capture and visual-centric data analytics and solutions to insurers, contractors, government, and commercial customers. The acquisition will accelerate Verisk’s position as a key provider of data, analytics, and decision support solutions based on aerial imagery.
Based in Rochester, New York, and Bothell, Washington, EVT was formed in January 2013 as a result of a combination of Pictometry International Corp., and Eagle View Technologies, Inc. The combined company maintains one of the most comprehensive image libraries, covering more than 85 percent of the U.S. population, more than one million square miles, and approximately 90 percent of total U.S. structures. EVT leverages this image library to provide proprietary solutions to property and casualty insurance, government, and a variety of other commercial markets. EVT has developed unique technology for image capture and processing, enabling understanding of physical property characteristics that can be used for valuation and risk management. With more than 24 petabytes of imagery-related data, EVT has established itself at the forefront of the market.
“The acquisition of EVT advances our position in the imagery analytics market, adding new municipal and commercial customers. The transaction supports the aerial imagery solution development that has been under way at our Xactware unit,” said Scott Stephenson, president and chief executive officer of Verisk Analytics. “We believe we can build on the comprehensive coverage of EVT’s library to expand solutions to our customers, including underwriting and, over time, international solutions as well. We look forward to combining the strong business built by the EVT team with Verisk’s analytical capabilities and unparalleled customer relationships in the property/casualty insurance market.”
Jim Loveland, president and chief executive officer of Verisk’s Xactware business, added, “We’re excited to welcome our new colleagues to the Verisk family and look forward to integrating their substantial knowledge and experience in imagery with our own. This acquisition will allow us to enhance our existing claims and underwriting software tools and expand the solutions we can offer to our existing property/casualty customers. We also intend to enhance solutions that EVT is currently providing to the municipal, government, and other commercial markets.”
“This combination is a natural culmination of the businesses we’ve built over the years and a win for our customers and employees,” said Chris Barrow, CEO of EVT. “Our teams stand ready to build on the strength of our existing solutions with the benefit of Verisk’s analytic expertise, customer relationships, and financial resources.”
The purchase price is $650 million to be paid in cash to stockholders of EVT. Verisk expects to receive approximately $25 million in tax benefits as part of the transaction. In addition, Verisk will reduce the cash payment by approximately $13 million to reflect an existing minority equity ownership in EVT. The transaction is expected to close by July 15, 2014, subject to the completion of customary closing conditions, including receipt of regulatory and shareholder approvals. Verisk expects to use cash on hand and available capacity under its revolving credit facility to fund the purchase. The transaction is expected to be neutral to adjusted EPS in 2014.
Verisk Analytics will provide further details about the acquisition on a conference call on Wednesday, January 15, 2014, at 8:30 a.m. Eastern time (5:30 a.m. Pacific time), available via webcast at http://investor.verisk.com . The discussion is also available through dial-in number 1-888-565-9340 for U.S./Canada participants or 706-634-5695 for international participants.
A replay of the webcast will be available for 14 days on the Verisk investor website and also through the conference call number 1-855-859-2056 for U.S./Canada participants or 404-537-3406 for international participants using Conference ID # 31024680.
About EagleView Technology Corporation
EagleView Technology Corporation is a leading provider of aerial imagery, data analytics, and GIS solutions serving the commercial, government, and public utility sectors. The company’s patented image capture processes and 3-D modeling algorithms coupled with property-centric analytic tools empower end-user workflows with scalable, efficient, and highly accurate answer sets in support of property claims, risk management, emergency response, assessment, corridor mapping, and more. For more information, visit www.eagleview.com or www.pictometry.com .
About Verisk Analytics
Verisk Analytics VRSK -1.08% is a leading provider of information about risk to professionals in insurance, healthcare, mortgage, government, and risk management. Using advanced technologies to collect and analyze billions of records, Verisk Analytics draws on vast industry expertise and unique proprietary data sets to provide predictive analytics and decision support solutions in fraud prevention, actuarial science, insurance coverages, fire protection, catastrophe and weather risk, data management, and many other fields. In the United States and around the world, Verisk Analytics helps customers protect people, property, and financial assets. For more information, visit www.verisk.com .