Lizard Insurance

This Bain acquisition case asks whether Lizard Insurance, a US auto insurer, should keep or sell TechSize — a B2B insurance-compliance software subsidiary it inherited when acquiring MediumSure. It tests the candidate’s ability to structure a binary hold-versus-sell decision, evaluate market attractiveness and synergies from exhibits, and value a business using comparable-transaction multiples before delivering a crisp recommendation.

Key Insights:

1. The core decision reduces to a clean binary — keep (do nothing or grow organically/inorganically) versus sell (partial IP license or full spin-off/sale) — and recognizing that structure early is what a strong candidate demonstrates.
2. The keep option is unattractive: TechSize needs substantial reinvestment to hold its position, and a B2B software product offers no cross-sell or up-sell synergies with Lizard’s B2C insurance business.
3. Exhibit reading drives the verdict — the insurance software market is both fragmented (no player above ~25% share) and essentially flat over 2011 to 2020, signaling a stagnant, unappealing space to stay invested in.
4. Valuation should lean on comparable transactions rather than a single method, and a sharp candidate excludes the non-comparable toy company before deriving the ~5x EBITDA multiple, arriving at roughly $1B for TechSize.
5. A complete recommendation names the risks — a thin pool of credible buyers and a small comparables sample — and proposes buyer due diligence as the next step.