Guidewire to Acquire hyperexponential for Up to $2.1B; Secures $1.0B Debt Financing

Executive Summary

On October 27, 2026, Guidewire Software, Inc. (NYSE: GWRE) entered into a definitive Acquisition Agreement to acquire 100% of the share capital of London-based Hyperexponential Ltd ("hyperexponential" or "hx"). The acquisition carries a base cash consideration of $1.7 billion, plus up to $400.0 million in contingent cash earnouts linked to post-closing recurring revenue milestones. Concurrently, Guidewire entered into a Debt Commitment Letter with Bank of America and Citibank for a $1.0 billion senior secured incremental Term Loan A facility to fund a significant portion of the cash consideration.

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Transaction Structure & Financial Terms

1. Purchase Consideration:

   • Base Cash Consideration: $1.7 billion, subject to standard working capital, net cash, indebtedness, and retention adjustments.
   • Contingent Consideration (Earnout): Up to $400.0 million payable upon reaching specified recurring revenue targets post-closing.
   • Closing Conditions: The acquisition is not subject to any closing conditions and is anticipated to close in Q2 of Guidewire's fiscal year 2027.

2. Acquisition Financing ($1.0B Term Loan A):

   • Commitment Parties: Bank of America, N.A., Citibank, N.A., and BofA Securities, Inc.
   • Facility: Senior secured incremental Term Loan A facility under Guidewire's Existing Credit Agreement (dated Dec 2, 2024).
   • Maturity Date: December 2, 2029.
   • Pricing: Leveraged-based pricing grid:
     • Term SOFR + 1.00% to 2.00% (based on leverage ratios from <0.75x to >3.00x across five tiers).
     • Base Rate + 0.00% to 1.00% across corresponding leverage tiers.
   • Amortization: 5.0% per annum of initial principal paid quarterly starting the fifth full fiscal quarter after closing.
   • Financing Condition: The closing of the acquisition is not conditioned upon the receipt of financing proceeds.

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Strategic Rationale & Market Positioning

• Agentic Underwriting Expansion: hyperexponential operates an AI-native underwriting and pricing platform serving commercial and specialty lines insurers, reinsurers, and managing general agents (MGAs), currently powering underwriting decisions for over $75 billion in annual commercial P&C premiums.
• Complementary Technology: Marries Guidewire's policy administration, claims, and billing core systems with hyperexponential's pricing models and real-time portfolio steering engines.
• Customer Roster: Expands London market and European reach, with major clients including Aviva, Allianz, Sompo, Beazley, Markel, HDI, and Cincinnati Financial.

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Financial Impact & Guidance

• ARR Growth Accretion: Expected to contribute ≥650 basis points to Guidewire’s FY2027 ARR growth on an inorganic basis, and ≥150 basis points to durable organic ARR growth beginning in FY2028.
• FY27 Q1 Guidance: No effect on existing Q1 FY2027 guidance provided on September 3, 2026.
• Guidance Update: Full updated guidance for Q2 FY2027 and the full fiscal year 2027 will be provided on the Q1 FY2027 earnings call in December 2026.