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Bain seals $1.8bn exit to Hellman, JMI Equity

The firm will sell insurance software company Applied Systems, which it acquired in 2006 for about $675m. 

Bain Capital will sell insurance software company Applied Systems to Hellman & Friedman and JMI Equity for $1.8 billion. 

Bain declined to disclose a return multiple for the deal, but sources close to the situation said the exit will generate more than a 4x return for the firm, including previous dividends. Applied Systems provides software for insurance agency and broker management systems and data exchange with customers, which include more than 12,000 agencies and brokerages and 350 insurers in the US, Canada and the UK. Bain acquired the company for around $675 million in 2006, investing from its $10 billion Fund IX that closed the same year.

Under Bain’s ownership, profits at Applied Systems nearly tripled. The firm helped both “expand market share and significantly enhance the product suite”, Bain managing director Andrew Balson said in a statement.

Hellman & Freidman and JMI Equity declined to comment. The sale is expected to close in early 2014.

Hellman & Friedman began its recent acquisition spree last week when it acquired 70 percent of online marketplace Scout24 Holding from Deutsche Telekom in a deal valued at €1.5 billion. The firm is investing from its $8.9 billion Fund VII.

Growth equity firm JMI Equity is investing from its $875 million Fund VII. 

For Bain, the software exit comes roughly six months after the firm led a group of investors in one of the largest private equity buyouts of 2013, the$6.9 billion take-private of  software maker BMC Software alongside Golden Gate Capital, Insight Venture Partners and GIC Special Investments, the private equity arm of the Government of Singapore Investment Corporation.

Bain has returned roughly $9 billion to limited partners in 2013. The firm is raising its eleventh buyout fund, which has a $6 billion target and is expected to close before the end of the year. Bain had raised $4.8 billion for the fund as of October, according to Private Equity International’s Research and Analytics division.