Sale of telematics unit could fetch £8m according to ‘sources close to the matter’
Direct Line is in advanced talks to sell off a telematics business to a private equity house, sources close to the matter have said.
It is believed that the insurer will fetch only a ‘token sum’ for the Tracker business, from Disruptive Capital, whose chairman is financier Edmund Truell, the Financial Times reports.
Bought in 2005 it is understood that Direct Line is planning to offload it because ‘owning a manufacturing division does not fit with its strategy’.
The insurer is expected to make about £8m from the sale of the business, which is reported to have lost about £2m last year but has installed an estimated £100m worth of equipment nationally.
If the deal is successful it could create the UK’s biggest corporate vehicle tracking network if Tracker is combined with Lysanda, a Disruptive-owned company that designs telematics-related software.
The combined technology group would cover about 400,000 vehicles and be called Tantalum.
If it goes ahead with the sale, Direct Line is expected to retain other telematics-related interests, including a mobile phone app it launched in June.
No deal has yet been reached and the two sides hope to reach an agreement in November.