- Esure was founded by tycoon Sir Peter Wood in partnership with Halifax bank
Belgian insurance giant Ageas has agreed to buy Esure in a £1.3billion deal that will create the UK’s third-largest personal lines insurer.
Ageas said the takeover would broaden its European presence and target customer demographics, and bolster its presence in the UK price-comparison website market.
The deal is expected to boost revenues to £3.25billion by 2028.
It plans to fund the deal, which is expected to close in the second half of this year, through a mix of surplus cash and newly issued debt or equity.
Once that happens, the business expects to generate more than £100million in annual pre-tax cost savings and an ‘unlevered’ return on investment exceeding 12 per cent.
Esure was founded in 2000 as a joint venture between the Halifax bank and serial entrepreneur Sir Peter Wood, who also started Direct Line, the UK’s first-ever telephone-only insurer.
Takeover: Ageas has agreed to buy Esure from Bain Capital in a £1.3billion deal
The Surrey-based group became known during the first decade for its ‘Calm Down Dear’ advertisements starring film director Michael Winner.
It later established the women-focused brand Sheila’s Wheels and acquired price comparison site Gocompare, which it subsequently demerged.
Esure went public on the London Stock Exchange in 2013 before delisting five years later, when private equity giant Bain Capital bought the business for £1.2billion.
Wood, who runs investment vehicle SPWOne, reportedly earned £200million from the company’s listing and £360million from the Bain sale.
Ant Middle, chief executive of Ageas UK, said Esure’s takeover ‘aligns perfectly’ with the Brussels-based firm’s strategy.
He added: ‘As demand for motor and home insurance grows, Ageas will be perfectly positioned to gain market share and become the insurer of choice for our existing and new customers.’
Due to record home policy demand, Esure’s total policies increased by 2.9 per cent to over 2.1 million, while its turnover grew by 14 per cent to £1.1billion.
Combined with lower claims frequencies and higher average written premiums, this helped it swing from a £16.7million trading loss in 2023 to a £126.8million profit last year.
Dean Standing, chief revenue officer at data intelligence group Sagacity, believes Ageas’ pursuit of Esure is ‘all about customer growth.
He added: ‘As a digital-first insurer, you assume Esure has clean and accurate data, but stitching that together with Ageas’ won’t be easy.
‘Differences in data structures, processes and compliance can quickly create headaches. Esure’s customers will want clarity on how it will affect them, their policies, their cover and their data.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .