September 5, 2013 / 8:05 PM / in 4 years

KKR to buy Mitchell International from Aurora Capital

Sept 5 (Reuters) - Private equity firm KKR & Co LP has agreed to buy car and property claims software company Mitchell International from Aurora Capital Group, the companies said on Thursday.

Reuters reported last month that KKR was among the firms vying for Mitchell in a sale that Aurora was hoping would fetch up to $1.5 billion.

The firms did not disclose financial details. But two people familiar with the matter, who are not authorized to discuss the details publicly, said KKR would pay less than the $1.5 billion Aurora was hoping for.

The transaction is expected to close in the fourth quarter.

“We believe that Mitchell represents an attractive investment in a market leader in an important market segment,” Herald Chen, KKR’s co-head of technology investing group, said in a statement.

Founded in 1946, San Diego, California-based Mitchell provides information and software services to insurance companies and collision repair facilities, which rely on the company’s information to estimate labor times and the cost of replacement parts.

Joined by investors that included General Electric Pension Trust, Aurora acquired Mitchell in 2007 from private equity peer Hellman & Friedman LLC for an undisclosed amount.

The North American market for software and services designed to automate the auto insurance claims process is dominated by a few players - Mitchell, CCC Information Services Inc and Solera Holdings Inc, according to Standard & Poor’s Ratings Services.

In January, Leonard Green & Partners LP, another buyout firm, acquired CCC from Investcorp, one of the Middle East’s largest private equity houses, for more than $550 million.

KKR was advised by BofA Merrill Lynch and Three Ocean Partners on the transaction. Goldman Sachs & Co served as lead financial advisor to Mitchell. William Blair & Co and Guggenheim Securities also advised the company.

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