Elliott builds stake in $3.3B software firm CCC exploring sale

Activist investor Elliott Investment Management has accumulated a large stake in CCC Intelligent Solutions, three people familiar with the matter said, intensifying pressure on the software provider as it explores a sale with Morgan Stanley.

"Elliott's involvement raises the probability of a transaction and could push management to move faster on a sale," said Tom Brennan, an M&A analyst at a New York-based research firm. "The company's valuation decline makes it an attractive target for private equity."

CCC's market value has fallen to roughly $3.3 billion from about $6.4 billion a year ago, a 48% decline, as investors grew concerned about slowing growth and weaker industry claims volumes. Shares closed at $5.39 on Thursday before jumping 13% to $6.09 in after-hours trading following the Reuters report on the sale exploration. The stock has lost about 44% over the past 12 months.

The Chicago-based company provides software used by auto insurers, collision repair shops, automakers and parts suppliers to manage accident claims and vehicle repairs. Its platform connects more than 35,000 businesses across the property-and-casualty insurance ecosystem. CCC previously explored a sale in 2023 after attracting takeover interest, though no deal materialized.

Advent International, which acquired CCC in 2017 and took it public through a merger with a special purpose acquisition company in 2021, fully exited its investment last year through a series of secondary share offerings, including the sale of its remaining stake in November. That exit leaves CCC without a controlling shareholder, making it more vulnerable to activist pressure and potentially easier for a buyer to acquire.

Elliott, one of the most prominent activist investors with a track record of pushing for strategic alternatives including sales, has reached out to the company's board, according to the people. The firm typically targets companies where it sees a clear path to unlocking value, often through a sale, asset divestiture or operational overhaul.

Morgan Stanley is advising CCC on the sale process and has contacted prospective buyers, including private equity firms, the people said. A deal would need to account for the company's slower adoption of newer software products and the broader headwinds facing the insurance technology sector, where claims volumes have softened.

For Elliott, the bet on CCC follows a pattern of targeting mid-cap software companies with depressed valuations and clear strategic options. The firm's involvement could set a floor on the sale price and create competition among potential acquirers, people familiar with activist strategies said.

This article is for informational purposes only and does not constitute investment advice.