Homeowners of America sold to software company Porch for $100mn
Residential property MGA Homeowners of America (HOA) has been sold to software company Porch for around $100mn.
The transaction comprises of $75mn in cash at closing, with $25mn in either cash or Porch common stock based on the share price at the time the transaction closes.
Porch said the HOA acquisition from majority shareholder IA Capital will leave the combined business with $270mn of gross written premium.
Porch noted that home insurance was a “key growth opportunity” for the business and combining the MGA and insurance carrier hybrid with its insurance agency business would attract better customers through a more comprehensive insurance offering.
It added that the acquisition would make it one of the largest InsurTech companies and combining the software company’s data with HOA’s pricing and claims experience would give it “significant advantages” in driving growth.
Founded in 2006, HOA is licensed in 31 states overall but operates in six: Texas, Arizona, North Carolina, South Carolina, Virginia and Georgia. As part of Porch, the MGA can target nationwide expansion.
Porch also announced it had made three other acquisitions of software-as-a-service marketing and data platform V12, home inspector software company PalmTech and roofing contractor specialist iRoofing.
Porch said the combined purchase price for HOA and V12 for $122mn is around 2x more than the combined estimate of 2021 revenue for both businesses. As a result of the acquisitions, Porch said it was increasing its revenue guidance from $120mn to $170mn for the year.
The HOA transaction, subject to regulatory approval, is subject to close in the second quarter of 2021.
RL Viton was financial adviser to HOA and Wilkie Farr & Gallagher was its law firm.