A majority stake in Colorado Springs-based insurance software provider Insurance Technologies will be sold to Boston-based private equity firm Thomas H. Lee Partners under a deal announced this week.
Insurance Technologies is among the largest employers in downtown Colorado Springs with 250 workers developing and selling software that helps carriers, agencies, financial institutions and others sell insurance, annuities, retirement funds and other investments. Thomas H. Lee Partners plans to retain longtime CEO David Fenimore, the rest of the company’s senior management team, many of which have been with the company since it was started in 1995, and other employees.
“David and the Insurance Technologies management team have done a tremendous job of building an innovative, client-centric platform that provides a flexible set of sales and automation services and solutions and is driving the financial services sector forward,” said Ganesh Rao, THL managing director and head of financial services, and Edward Shahnasarian, a THL principal.
NexPhase Capital, a New York-based private equity firm, acquired Insurance Technologies in 2014 from founder Larry Wiedeman.
Terms of the deal between NexPhase and THL for the company were not disclosed but an Insurance Technologies spokeswoman said in an email that the transaction is expected to be completed early next month, pending “customary closing conditions and regulatory approvals” and that the company headquarters will remain in downtown Colorado Springs.
Fenimore said THL’s “deep insurance experience and track record of investing in growth financial technology businesses will be invaluable as we enter the next chapter of the company’s growth.”
The deal will allow Insurance Technologies to continue developing its technology and getting it on the market more quickly, including upgrades to its software-as-a-service cloud product. Rao and Shahnasarian said the company’s plans also could include acquisitions that add to its expertise and technology.
Wiedeman, who died in 2017, started the company with six employees in his home to administer life insurance and health and dental plans, managing deferred compensation for top executives and creating complex formulas that calculate life insurance benefits.
About half of the company’s early staff were software developers for MCI Telecommunication’s software operation in Colorado Springs, now owned by Verizon.
Insurance Technologies moved its offices in 1998 to a former department store building in the Palmer Center and received a $5.4 million investment in 2005 to expand its product line and geographic reach.
THL was started in 1974 and has raised more than $25 billion for investment in the consumer, financial services, health care and technology industries.
The company’s investors include public and corporate pension funds, sovereign wealth funds, financial institutions, endowments and high net worth families. Some of THL investments include concession giant Aramark, restaurant chain Dunkin’, credit reporting agency Experian, television ratings giant The Nielsen Co. and publisher Houghton Mifflin.