Guidewire agrees to buy AI underwriting software maker hyperexponential for $1.7 billion in cash
The London-based company's deal adds up to $400 million in contingent payments and is partly funded by a $1.0 billion term loan.
Key takeaways
- Guidewire Software, Inc. (GWRE) agreed on Oct. 27 to acquire London-based Hyperexponential Ltd for $1.7 billion in cash, plus up to $400 million in contingent payments tied to recurring revenue targets. Closing is expected in the second quarter of fiscal 2027. A $1.0 billion term loan and cash on hand will fund the deal.
Guidewire Software, Inc. (GWRE) said on Tuesday it has agreed to buy Hyperexponential Ltd for $1.7 billion in cash, according to a regulatory filing.
Hyperexponential is a London-based agentic platform provider of AI-native underwriting and pricing software for commercial lines property and casualty, or P&C, insurers.
The base price is subject to adjustments for working capital, cash, indebtedness and certain retention amounts.
The company will also pay up to $400 million in additional contingent consideration. That payment depends on hyperexponential reaching specified recurring revenue targets after the deal closes.
The company said the acquisition is expected to close in the second quarter of its fiscal 2027. The filing says the deal is not subject to any conditions to closing.
The company said hyperexponential's software has powered underwriting decisions across more than $75 billion in annual commercial P&C premium for insurers, reinsurers and managing general agents.
Hyperexponential is already a PartnerConnect Technology Alliance Partner of Guidewire.
The company said the acquisition is expected to accelerate annual recurring revenue, or ARR, and revenue growth while remaining consistent with its long-term margin targets.
The company expects the deal to add at least 650 basis points to its fiscal 2027 ARR growth on an inorganic basis. Starting in fiscal 2028, it expects the deal to add at least 150 basis points to durable organic ARR growth.
CEO Mike Rosenbaum said, “We’re delighted to welcome Amrit Santhirasenan and the team at hyperexponential to Guidewire.”
Rosenbaum said the two companies are “uniquely positioned to deliver industry-specific AI solutions that will transform commercial underwriting.”
Amrit Santhirasenan, CEO and co-founder of hyperexponential, said the company was founded “on the conviction that underwriting judgment is the highest-leverage work insurers do.”
The company said it will fund the transaction with a $1.0 billion term loan and cash on hand. Bank of America, N.A. and Citibank, N.A. have committed to provide the loan under an incremental amendment to the company's existing credit agreement dated Dec. 2, 2024.
The term loan will carry interest at term SOFR, or the term secured overnight financing rate, plus a margin of 1.00% to 2.00%, or a base rate plus 0.00% to 1.00%. Pricing depends on the company's consolidated leverage ratio. The loan matures Dec. 2, 2029 and amortizes at 5.0% per annum of the initial principal, starting with the fifth full fiscal quarter after closing.
The company said the acquisition is expected to have no impact on its first-quarter fiscal 2027 guidance issued Sept. 3, 2026. It will provide second-quarter guidance and update full-year fiscal 2027 guidance on its earnings call in December 2026.
Centerview Partners is exclusive financial advisor to Guidewire, and Latham & Watkins LLP is its legal counsel. J.P. Morgan is exclusive financial advisor to hyperexponential, and Wilson Sonsini Goodrich & Rosati (UK) LLP is its legal counsel.
The company said it will file the acquisition agreement and debt commitment letter with its quarterly report on Form 10-Q for the quarter ending Oct. 31, 2026.