Automated Benefits Makes a Splash with MSB Acquisition

Until recently, Automated Benefits (TSXV:AUT), a Toronto based company that provides claims processing for the insurance industry, seemed happy with incremental growth. The company was expanding its operations, but the scale was quite small. Fiscal 2010’s revenue of $5.85-million was a big percentage increase over 2008, but that year’s top line was a scant $3.23-million.

Last week, however, Automated Benefits completed an acquisition that instantly changes the scope of its business. The company issued just over 52-million shares to pay $18.1-million for Marshall & Swift/Boeckh, LLC’s (MSB) claims division.

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MSB, which is owned by Kansas City based market research firm Decision Insight, has made an investment into Automated Benefits, and three execs from Decision Insight have joined the board. With 33.29% of all Automated Benefits common shares, Decision Insight is now the largest single shareholder in the company. The acquisition values the claims division of MSB at a little more than two-times sales, as Automated Benefits says the company’s annualized revenue was approximately $8-milion, noting that the division is profitable “excluding discontinued software development costs at this time.”

Automated Benefits is divided into two operating divisions, Automated Benefits Inc., which develops software to improve health and dental claims, and Symbility Solutions, which focuses on property claims. Symbility speeds up property claims and makes the process more transparent by giving every claim participant real-time access and collaborative tools.

The MSB acquisition punctuates a momentous beginning to 2012 for Symbility. In January, the company announced it will provide a claims processing and estimating solutions to the property division of Farmer’s Insurance, and followed that up by signing a five-year agreement with Chubb Insurance Company of Canada in March.

At press time, shares of Automated Benefits were up 4% to $.52 cents.

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