Three Am Law Firms Lead on Bain's Applied Systems Sale

, The Am Law Daily

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Boston-based Bain Capital announced Tuesday it has agreed to sell the insurance software provider Applied Systems to fellow private equity firms Hellman & Friedman and JMI Equity for $1.8 billion. Bain is being advised on the deal by frequent outside counsel Ropes & Gray, as is University Park, Ill.–based Applied Systems. Hellman & Friedman and JMI, meanwhile, are being represented in the matter by Simpson Thacher & Bartlett and Goodwin Procter, respectively.

In the press release announcing the deal, San Francisco–based Hellman & Friedman indicated it is acquiring its stake in Applied to take advantage of both the company's large user base and its Applied Epic management system product, which is geared toward the insurance industry and, among other things, lets users access information, track customer contact, automate auditing and tighten security to protect sensitive data, according to Applied's website. In a statement included in the press release, Applied managing director David Tunnell predicted that Applied Epic will become "the market leader in insurance technology for deployments both on premise and in the cloud."

For JMI, Tuesday's deal appears to fit in with a plan outlined on the Baltimore-based private equity firm's website under which it will invest up to $2.1 billion of the committed capital under its management in software and technology-enabled services companies.

The sale to JMI and Hellman & Friedman—which is expected to close in early 2014, subject to standard closing conditions—comes roughly seven years after Bain acquired Applied from San Francisco–based private equity firm Vista Equity Partner for $675 million, according to a New York Times story published at the time. Applied Systems' senior management team will retain a significant ownership position in the company after the deal is finalized.

The Ropes team advising Bain and Applied Systems is led by M&A partner Alfred Rose, who heads the firm's private equity transactions practice, and debt partner Sunil Savkar. M&A associate Minh-Chau Le and debt associate Patricia Lynch are also working on the matter.

Ropes—whose chairman, Brad Malt, has long served as Bain founder Mitt Romney's personal financial adviser—regularly acts as the private equity firm's go-to deal counsel. Among the recent transactions on which the firm has advised Bain was the latter's acquisition in August 2012 of a $1 billion stake in Indian business process management company Genpact from General Atlantic Holding Company and Oak Hill Capital Partners. Ropes also represented Bain in June 2012 when the private equity firm bought a 50 percent stake in Japanese television shopping network Jupiter Shop Channel from the Japanese trading company Sumitomo Corporation for approximately $1.3 billion.

A Ropes spokesman declined to comment on the firm's work on the deal.

The Simpson Thacher team representing Hellman & Friedman includes tax partner Katharine Moir, intellectual property partner Jeff Ostrow, executive compensation and employee benefits partner David Rubinsky, M&A partner Chad Skinner, credit partner Brian Steinhardt, and antitrust partner Peter Thomas.

Simpson Thacher advised Hellman & Friedman in August in connection with the latter's acquisition of insurance brokerage Hub International Limited from private equity firm Apax Partners for $4.4 billion. (Apax is a part owner of ALM Media LLP, the parent company and publisher of The Am Law Daily.) The firm also advised Hellman & Friedman on its purchase of building supply manufacturer Associated Materials from private equity firms Investcorp and Harvest Partners for $1.3 billion in September 2010. Simpson Thacher did not immediately return calls or emails seeking comment about its work on the matter.

JMI, meanwhile, is being advised by Goodwin corporate partner Mark Burnett advised JMI. Goodwin advised JMI when it acquired software maker Paradigm from Apax for $1 billion in cash in June 2012. Burnett declined to comment about his work on the matter.

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