Bain Capital secures £1.21bn esure deal

October 2018 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

October 2018 Issue

In a deal that will take the UK-based insurance firm private, global private equity firm Bain Capital Private Equity, LP and its affiliates is to acquire esure Group plc in a transaction valued at £1.21bn.

Under the terms of the agreement, Bain Capital will acquire all of the issued and to be issued shares of esure at 280 pence per share in cash. Bain Capital’s proposal represents a premium of approximately 37 percent to the closing share price of 204 pence on 10 August 2018.

The board of esure has indicated to Bain Capital that it would recommend a firm offer for esure if made by Bain Capital at the price set out in its proposal, subject to agreeing terms. In addition, Bain Capital reserves the right to make an offer at any time on reduced terms and introduce other forms of consideration or vary the mix or composition of consideration of any offer.

Furthermore, the esure board has stated that while it is confident that esure is well-placed to make good progress and deliver shareholder value, it also believes that the proposed acquisition will deliver a number of strategic benefits to esure’s business, including the opportunity to benefit from further investment by Bain Capital in a private context.

“This transaction is a great outcome for shareholders, for the company and for customers,” said Sir Peter Wood, chairman of esure. “Since its IPO in 2013, esure has grown to nearly 2.5 million in-force policies, delivered more than £800m of annual gross written premiums, and returned just under £300m to shareholders in dividends as well as the considerable value delivered to shareholders through the demerger of GoCompare. 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.”

Mr Wood is continuing as esure chairman following completion of the acquisition.

“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,” said Robin Marshall, a managing director and co-head of Bain Capital Europe. “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.”

Founded in 1984, Bain Capital is one of the world’s leading private investment firms. The firm partners with management teams to provide the strategic resources that build great companies and help them thrive. Bain Capital has made more than 760 primary and add-on investments and has $95bn in assets under management.

“esure’s nimble and focused approach, lean structure and strong use of technology positions it to grow in a changing insurance industry,” said Luca Bassi, a managing director at Bain Capital Europe. “Insurance companies with smarter operations and better technology are best placed to meet customers’ needs at competitive prices while delivering profitable growth.”

Bain Capital’s acquisition of esure is subject to customary competition and merger clearances, and on receiving the approval of the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) in the UK.

Mr Bassi concluded: “We are committed to investing capital in the best technology for

esure and believe that this, combined with our experience of growing highly regulated, complex financial services businesses can help esure thrive. We look forward to partnering with esure’s management team to accelerate its growth.”

Fraser Tennant