European private equity firm Cinven is to acquire Premium Credit Limited, the UK specialty finance provider, for an enterprise value of GBP462 million.
Premium Credit plays an important part in the UK economy enabling businesses and individuals to spread the cost of their insurance premiums and other essential purchases. It also provides financing for the payment of annual fees such as professional fees, membership subscriptions, commercial service charges and school fees. In 2013, the Company achieved gross advances of GBP3.7 billion, processing 25.8 million transactions. Premium Credit has approximately two million customers and works with 4,000 intermediaries.
Maxim Crewe, Partner at Cinven, says: “Premium Credit is the market leader within the UK insurance premium finance market with strong risk management, cash generative characteristics and a proven management team. The Company provides us with an exciting platform from which to capitalise on growth opportunities in the broader UK specialty finance market through the expansion of the Company’s existing product portfolio, new product launches and selective acquisition opportunities.
Peter Catterall, Partner at Cinven, adds: “Premium finance is a key source of funding for consumers and small businesses purchasing compulsory insurance products, such as motor, home or fire insurance. Premium Credit has a strong track record of delivering a valuable product with high levels of customer service.
“Cinven has a successful track record of acquiring financial services businesses, including Partnership, Avolon, Guardian Financial Services and Heidelberger Leben. We look forward to working with the team at Premium Credit to capitalise on growth opportunities whilst continuing to provide its customers and intermediaries with first class service and product.”