High street broker in £175m deal with Lloyd's TSB
Swinton said it had obtained one of the largest funding packages from Lloyds TSB this year in order to acquire Equity Insurance Brokers.
The £50m deal is financed as part of a £175m funding facility with Lloyds TSB, one of the biggest deals the bank has done in this difficult year
Swinton said six hundred jobs and ninety one shops nationwide had been safeguarded in the acquisition, which sees Swinton expand to become the only national insurance retailer network on the UK high street.
The deal will see all 91 of IAG’s Equity shops joining Swinton’s high street network increasing the overall total to 580, including 17 in Northern Ireland. Equity’s Open and Direct branches in Northern Ireland will continue to trade as Open and Direct.
Lloyds TSB Corporate Markets had agreed to provide £175 million funding facility to Swinton.
Swinton now manages over 3.25 million individual car and home insurance policies making it the third largest insurance retailer in the UK, and the only broker to have a truly nationwide network of branches.
The company has three UK call centres in Manchester, Halifax and Norwich and will now employ nearly 5,000 people spread across the country and operates five motor and two home insurance brands on the internet.
Equity and ‘Open and Direct’ employees have been reassured by Swinton that no jobs are under threat as a result of this deal which underlines its steadfast commitment to stay on the high street.
Patrick Smith, Swinton Group Chief Executive, said; “The acquired shops will be fully integrated into the business as will the Equity staff, whose expertise and knowledge of the communities in which they live and work, is very valuable to us. This deal is not about reducing staff numbers to increase margins, it is about providing great customer service to local communities.
“The acquisition of the Equity shops cements our position as the leading High Street insurance retailer, but our success is due to our multi channel retailing capability. Customers want to choose how they buy insurance and many customers young and old want to speak to an expert member of staff face to face. The internet is a great research tool for consumers, but people continue to yearn for someone knowledgeable to speak to.
“Recently many parts of the industry have focussed on driving customers into e-commerce serviced by overseas call centres for the sole benefit of cost efficiencies. The credit crunch is not an excuse for the UK financial sector to abandon the High Street. Now is the time for our industry to safeguard UK jobs.”
Swinton said it would continue to look for acquisition opportunities to enhance growth and that it was confident that the multi channel approach it has developed means it can also continue to grow organically.
Dave Allanson, Lloyds TSB Area Director and Head of Large Corporate in the North West commented; "I'm delighted that we've been able to support Swinton with this important development in the company's history. We've been working with Swinton for over two years and throughout this period Paul and the team have worked hard to develop a thorough understanding of this key, Manchester-based insurance player.
"Swinton has an enviable track record and has proved that is has the ability to succeed. The business is one of the most respected within the industry, both in the North West and nationally, and this latest acquisition should further strengthen its position in the market.
"This deal is one of the biggest that we've been involved in this year and the knowledge we have of Swinton and its growth plans enabled us to put together the right funding package, within the right timeframe. This deal once again demonstrates that despite the current economic climate, Lloyds TSB Corporate Markets is able to support top quality management teams - such as Patrick Smith and the team at Swinton - who have a clear vision for the future. We look forward to continuing the relationship with Swinton as they continue to drive the business forward."