French arm goes in £3.8m deal
The Innovation Group (TIG) will sell the French arm of MotorCare to Groupama UK's parent company, sources have revealed.
TIG was expected to announce the sale to the London Stock Exchange yesterday.
The deal, reported to be worth £3.8m, will ease fears about TIG's financial stability.
Last year it lost a significant IT project with Royal & SunAlliance (R&SA) and its share price dropped substantially.
Its equity was also susceptible to the rise and fall in popularity that affected all "dotcom" companies.
In June 2002 R&SA scrapped a £10m claims management system it was developing with TIG after almost two years' work. TIG, formed in 1997, bought MotorCare in October 2000 so it could offer customers an e-procurement system for managing vehicle repair networks.
MotorCare has branches in Surrey, Stuttgart and Chatou.
Its UK branch and managing director Geoff Bullen will not be affected by the deal, it is understood.
TIG will be further buoyed by the imminent completion of a deal with Zurich to provide a claims management system.
The deal is believed to be worth at least £1m.
A Zurich spokeswoman said a limited live pilot of the system would begin in mid-February.
"Everything is proceeding as normal," she said.
However, the group received a blow when forced to appoint a new stockbroker recently.
TIG's corporate finance manager was among a number of executives made redundant at ING Barings, prompting TIG to appoint Peel Hunt.
A TIG spokeswoman was unable to comment on the MotorCare deal, which she said was a "price sensitive issue".
Groupama's French spokeswoman did respond to Insurance Times in time for press.