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Hellman & Friedman to buy Applied Systems for $1.8 billion

(Reuters) - Private equity firm Hellman & Friedman LLC (H&F) has struck a deal to buy insurance software provider Applied Systems from Bain Capital LLC for $1.8 billion, H&F said on Tuesday.

JMI Equity, a private equity firm focused on building software and technology-enabled services businesses, will be investing alongside H&F, it said, without giving details.

The transaction is expected to be completed in early 2014.

Under the terms of the agreement, Applied Systems' senior management will maintain a significant ownership stake in the company, H&F said.

Reuters reported on Monday that Bain was in talks to sell the company and that a deal could be sealed this week.

Applied Systems, founded in 1983, sells its software to insurance agencies and brokerages. Bain acquired the University Park, Illinois-based company from Vista Equity Partners LLC in 2006 for an undisclosed price.

People familiar with the matter said on Tuesday that Bain acquired Applied Systems for $675 million, including debt, and Bain investors stand to get around 4.5 times their money back on the Applied Systems investment, including dividends drawn from the company over the years. Bain's initial equity investment in Applied Systems, as opposed to money borrowed for the deal, could not be learned.

"We believe Applied Systems is a uniquely positioned company in the global insurance software market," said David Tunnell, managing director of H&F.

"It combines the largest user base in the industry with Applied Epic, the fastest growing new agency management system, to be the market leader in insurance technology for deployments both on premise and in the cloud."

Insurance software companies have been growing in recent years on the heels of technological advances that allow customers instant access to their insurance information.

Earlier this month, Vista's financial software company Zywave Inc agreed to sell its insurance solutions division to another buyout firm, Aurora Capital Group LLC, for an undisclosed amount.

(Reporting by Nicola Leske and Greg Roumeliotis; Editing by John Wallace)

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