Multi-insurer panel ‘will help improve growth and earnings potential’
Broking group Brightside is raising cash to buy outright eBike and eCar for up to £34.6m, having lined up a panel of big-name insurers to underwrite the products. The Bristol-based company will buy the businesses from Southern Rock Insurance Company Ltd (SRICL).
Brightside has been talking to Aviva, Fortis, AXA, Groupama and LV= and is confident of securing the insurers to underwrite products for eCar.
The company will raise £9m via the placing of 36 million new ordinary shares. It will use the cash to buy the policy books, new business and renewal rights of the eCar and eBike insurance brands, initially for £15.5m.
A further £19.1m will be paid on deferred consideration, dependent on performance.
Brightside began the process for the deal in November 2008, when it bought the eVan brand from SRICL and later entered into options to purchase the policy books and rights associated with eCar and eBike.
Brightside chief executive Paul Chase-Gardener said: “The acquisition of eCar and eBike will significantly enhance the group’s footprint in the personal lines insurance market. The introduction of the eCar multi-insurer panel also represents an opportunity to further accelerate the growth of this product and its earnings potential.”
Brightside said the deal will add two complementary personal insurance lines to the group product portfolio, increasing the number of policies written by the group by more than 180,000 annual policy sales.
The new ordinary shares will represent around 7.91% of the company's issued ordinary share capital following admission.
The deal will mean that Brightside co-founder and insurance director Arron Banks will give up equity. Banks will sell 5,425,664 shares – or 1.3% of the company. He will retain 77.5 million shares, around 17.05% of the company.