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What happened

CCC Intelligent Solutions (NASDAQ: CCCS), a next-generation insurance-services provider to the auto industry, is apparently in play. Following a media report that its majority owner is in talks to sell the company, CCC’s share price vaulted nearly 4% higher on Monday.

So what

In an exclusive report published after market hours on Friday, Reuters wrote that said owner, private equity firm Advent International, is exploring a sale of CCC. Advent currently holds a 56% stake in the specialty insurance-services company.

Citing “people familiar with the matter,” Reuters added that storied investment bank Morgan Stanley is advising CCC in its discussions with potential acquirers. The article did not identify any of these apparent suitors, but the sources did say that they include entities active in acquiring businesses.

Neither CCC nor Advent has yet publicly commented on the Reuters article.

Now what

Although CCC flipped far into the red in its most recently reported quarter (with a generally accepted accounting principles (GAAP) net loss of almost $98 million against the $15.6 million profit in the same period the previous year), it has shown encouraging growth on the top line.

The company has also recovered from the deep trough that was the COVID-19 pandemic. During that period, demand sank for many kinds of products and services affiliated with cars due to the numerous lockdowns and closures.

As a company still somewhat in recovery, CCC likely presents an attractive target for an acquirer who might be able to keep it on the road to improvement. Given the positive state of the global car market — the United Auto Workers strike notwithstanding — it’s very possible that Advent won’t labor too hard finding a buyer.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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