Solera's instant IPO

Generally, private equity firms focus on established companies -– which are usually underperforming. But, sometimes they will look at start-ups.

The process is known as a "leveraged buildup." Basically, a private equity firm will invest a large amount of money to back a top-notch management team. The team, in turn, will seek-out major acquisitions.

This is the case with Solera Holdings, which recently filed to go public.

Tony Aquila, the CEO, started Solera in February 2005 and got the financial support of GTCR, which is a marquee private equity firm.

At age 42, Aquila has a great resume. He was president of Mitchell International, a provider of software for the auto insurance industry. Before this, he started his own software processing company, Ensera (which, yes, he sold to Mitchell International in 1999).

Well, with a slug of capital, Aquila wasted little time. He purchased the Claims Services Group from ADP (NYSE: ADP) in April 13, 2006. The firm is a global software company that provides claims processing support.

In fiscal 2006, the company posted $430.2 million in revenues. And, the market opportunity is large – with more than 100 million claims filed each year worldwide.

With the IPO market perking-up, the prospects look promising for this offering (which will likely hit the market within a few months).

The ticker symbol is "SLH" and you can find the prospectus on the SEC web site.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.