CCC Intelligent Solutions Holdings Inc is exploring strategic alternatives, including a potential sale of the company, according to a Reuters report citing sources familiar with the matter.
The Chicago-based provider of cloud-based software for the property and casualty (P&C) insurance industry has reportedly appointed Morgan Stanley to lead the process. Initial discussions have already been held with several private equity firms as part of the outreach, the report said.
Investors responded positively to the development, sending CCC shares more than 13 per cent higher in extended trading.
CCC develops artificial intelligence-powered workflow software that connects more than 35,000 participants across the motor insurance ecosystem, including insurers, vehicle repair shops, parts suppliers and original equipment manufacturers (OEMs).
The reported sale process follows a difficult 12 months for the company. Its market capitalisation has fallen sharply from approximately US$6.4 billion to about US$3.3 billion, representing a decline of around 44 per cent.
The company’s performance has been weighed down by lower motor insurance claims volumes and a slower-than-expected rollout of its latest software products, factors that have prompted a more cautious stance from investors.
CCC’s challenges also reflect broader weakness across the enterprise software sector. Concerns that advances in artificial intelligence could reduce demand for certain software services have contributed to lower valuations across the industry.
The iShares Expanded Tech-Software Sector ETF, which tracks a broad range of software companies, has declined by more than 15 per cent over the past year, according to Investing.com data.
This is not the first time CCC has explored a potential sale. Reuters reported that the company also reviewed strategic options in 2022 after receiving takeover interest. However, those discussions ended without a transaction being completed.
