Formula to post huge gain on Sapiens sale to Advent

US private equity firm Advent has agreed to buy Israeli insurance software provider Sapiens (TASE: SPNS; Nasdaq: SPNS) at a valuation of $2.5 billion. The share price in the all-cash deal is $43.5, representing a premium of 64% on Sapiens’ closing price at the end of the last week, before reports of an impending sale, and of 47.5% on the current price on Nasdaq. Sapiens has not come near this price in recent years

In 2020, Advent bought Israeli cybersecurity company Forescout, then traded on Nasdaq, for $1.67 billion.

The deal for the acquisition of Sapiens is expected to close in the final quarter of 2025 or the first quarter of 2026, subject to approval by the Sapiens shareholders and relevant regulators. Following completion of the transaction, Sapiens’ shares will be delisted. In its announcement of the deal, Sapiens states, “Advent has arranged committed debt and equity financing commitments for the purpose of financing the transaction, providing a high level of closing certainty.”

“Following a deliberate process, the Board of Directors approved this transaction, which delivers an excellent outcome for Sapiens’ shareholders, providing them a substantial cash value at an attractive premium,” said Sapiens CEO Roni Al-Dor. “We are excited to enter the next chapter for Sapiens in partnership with Advent to continue supporting insurance carriers with their entire transformation journey, delivering the product innovation and service excellence they expect from us. Sapiens remains fully committed to being a global leader in SaaS, digital, and AI-driven insurance software solutions across Life, Pension & Annuities and P&C markets.”

Formula Systems (TASE: FORTY; Nasdaq: FORTY) holds a 43.5% stake in Sapiens, which is valued at just $257 million on its books, but is worth $1.06 billion under the terms of the deal with Advent. In its filing with the US Securities and Exchange Commission on the deal, Formula states: “Advent will acquire the majority of the common shares of Sapiens currently held by Formula, which will continue to retain a meaningful minority ownership position in Sapiens.” The company did not specify what this minority position would be, but informed sources put it at 19%. Formula states that it will record a pre-tax gain of $775 million in its 2025 financials.

Formula CEO Guy Bernstein said, “Formula will continue to retain ownership in Sapiens and is excited to partner with Advent to accelerate the transition to AI and SaaS, delivering the next generation of insurance solutions for our customers.”

Sapiens buys two companies in a week

Formula in advanced talks on sale of Sapiens stake

Advent begins $1.6b tender offer for Forescout

Advent director Douglas Hallstrom said, “We will work with the company to accelerate investment into technology innovation, AI, and customer centricity. This transaction comes at a critical time of market change, and we believe Sapiens will more effectively be able to navigate this in a private setting.”

Formula is up by about 12% and Sapiens by about 40% on the Tel Aviv Stock Exchange this morning.

Published by Globes, Israel business news – en.globes.co.il – on August 13, 2025.

Source link