Deal funded by £15m refinancing facility from Lloyds Bank
Doncaster-based outsourcing firm Direct Group has acquired Simple Insurance from Leeds-based UK General.
Simple provides specialist insurance for landlords and caravan owners with around 55,000 live policies, as well as a direct to consumer travel insurance offering. It sells primarily through the internet.
Funding for the deal was provided as part of a £15m refinancing facility from Lloyds Bank Wholesale Banking & Markets Acquisition Finance.
Direct Group was established in 1990 and underwent a management buyout in 2007 backed by mid-market private equity firm LDC. Since the deal, it acquired insurance broker Millennium in 2008 to develop its capability in distribution, followed by the Evander Validation Services business in 2010.
Direct Group’s chief executive Derek Coles said: “We provide a range of outsourced services to the industry and we are delighted to acquire the policy portfolio and servicing of the ‘Simple’ business to enhance our overall distribution business activities.
“This deal allows Direct Group to continue its strategy of providing insurance platforms and a range of products for its partners.”
LDC investment director Jon Pickering said: “This is the fourth acquisition for Direct Group since we originally backed the MBO in 2007.
“Since then, Derek and his team have transformed the business into a recognised leader in outsourced solutions to the insurance sector, with a well-diversified offering, superior customer proposition and a market leading technology platform.
“With a newly-strengthened capital structure, the business is ideally placed to continue executing its growth strategy in the UK insurance market.”
Pinsent Mason provided legal advice to Direct Group, while Ernst & Young provided financial due diligence. Deloitte provided commercial due diligence.