Solera Holdings, Inc. (SLH, Financial) is a company we’ve followed for several years but were unable to purchase due to the fact that it remained just above the portfolio’s market-capitalization range. However, in July the company’s market cap declined, making it a viable investment for the portfolio. As a provider of risk and asset management software and services to the global automotive industry, Solera is a stable business that is both predictable and defensive in nature. The majority of the company’s revenues are recurring, and it has a strong competitive position, particularly outside of the U.S. where it generates over half of its revenue. In August, Solera’s management announced the sale of the company to private equity firm Vista Equity Partners for $6.5 billion, causing the stock to appreciate. We viewed the increase in Solera’s share price as an opportunity to take profits and trimmed our position.
From the Meridian Small Cap Growth Fund fourth quarter commentary.
