Private equity firm Bain Capital has agreed terms to takeover UK-listed motor insurer Esure in a $1.2bn deal.
The all-cash acquisition by the US PE house – which values Esure at £2.80 a share – will take the personal lines insurer private. The takeover offer has been tabled by Bidco – a subsidiary of Bain Capital.
Esure said that the acquisition will bring a “number of strategic benefits” to the business, with the insurer pointing to further investment from Bain Capital.
The carrier said that Peter Wood – who founded the group in 2000 and has held the role of chairman since – would remain at the helm following the takeover.
“In view of Sir Peter Wood’s extensive experience in the insurance sector and track record of driving growth and profitability at Esure, the board of Bidco believes that the ongoing participation of Sir Peter Wood in the business after the scheme has become effective is an important element of the offer, and are pleased that Sir Peter Wood has agreed to continue as chairman of esure following the completion of the offer,” Esure said in a letter to shareholders.
In addition, Esure said Wood – who also founded Direct Line Group in the 1980s – had agreed to reinvest £50mn back into the insurer as part of the deal.
“I’m pleased to be announcing this transaction today, because it is a great outcome for shareholders, for the company, and for customers,” Wood said.
“Since its IPO in 2013, Esure has grown to nearly 2.5mn in-force policies, delivered more than £800mn of annual gross written premiums, and returned just under £300mn to shareholders in dividends as well as the considerable value delivered to shareholders through the demerger of GoCompare,” Wood added.
“As a private company and with Bain Capital’s backing, Esure will be able to invest behind the innovation required to fully realise the opportunities in this market.”
“I am pleased to be continuing as chairman and am fully aligned with Bain Capital, who I believe will be a tremendous partner in the next phase of Esure’s journey.”
Commenting on the deal, Robin Marshall, a managing director and co-head of Bain Capital Europe, said: “Sir Peter Wood is a towering figure in the industry and we would be delighted to be able to take the company that he and his team have built to the next level.”
“We are excited that he will remain a minority shareholder in the company and also grateful that he will remain as chairman to facilitate a smooth transition to private ownership,” Marshall added.
Luca Bassi, a managing director at Bain Capital Europe added: “Esure’s nimble and focused approach, lean structure and strong use of technology positions it to grow in a changing insurance industry: insurance companies with smarter operations and better technology are best placed to meet customers’ needs at competitive prices whilst delivering profitable growth.”