Irish insurance software company Fineos, which is expected to surpass €100 million in revenues this year, has acquired US company Spraoi in a deal that could be worth up to $10.6 million (€8.8 million).
Founded in 2017 and headquartered in Ardmore, Pennsylvania, Spraoi is a provider of machine learning capabilities for the employee benefits and life industry sector. It currently has eight clients and achieved revenues of $6 million in 2020.
It is expected to be earnings accretive to Fineos after its first full year.
Fineos is acquiring Spraoi for an upfront cash payment of $4 million, and an earn out of up to $6.6 million over three years subject to specific revenue hurdles being met.
The acquisition will be funded by existing cash reserves and the issuance of 700,000 share options to Spraoi’s three co-founders and team of 23 employees.
Fineos chief executive Michael Kelly said the Spraoi's digital and machine learning capabilities would greatly enhance its products.
Mr Kelly said the acquisition will enable Fineos to make the best use of Spraoi’s technology across its products in a move that would increase service reach, reduce customer service friction and provide greater insight.
“Spraoi is an innovative insuretech in the employee benefits space whose leaders have a strong background in the life, accident and health industry, as well as deep expertise in core systems and machine learning. That combination makes Spraoi a natural addition to the Fineos team as we continually improve the platform to meet the needs of our clients,” he said.
The fintech, which is headquartered in Dublin, recently forecast turnover to be in the range of €102 million and €105 million for the 12 months to the end of June, up from €87.8 million a year earlier.
Founded by Mr Kelly in 1993, Fineos is a provider of software solutions for global life, accident and health insurance companies. It counts seven of the top 10 group life and health carriers in the US.
Employing over 1,000 people, the company raised about €130 million when it became the first Irish-headquartered to company to float on the stock exchange in Australia in August 2019.
