UK motor insurance specialist Markerstudy is reported to be acquiring the insurance operations of BGL Group, which also owns price comparison giant Comparethemarket, in a deal worth £400 million.
Sky News reported yesterday that Markerstudy is buying the BGL insurance operation with the support of a capital injection from its private equity backer Pollen Street Capital.
While a £400 million price tag has been cited, it’s also reported that additional payments may be part of the deal, resulting in an eventual total paid of closer to £500 million.
BGL’s insurance arm includes wholly owned brands such as motor insurers Budget Insurance and Dial Direct, and Beagle Street (an online life insurer), as well as distribution agreements for the likes of Marks & Spencer and the RAC, plus white-label agreements with major UK corporates.
BGL Group is part-owned by one of the largest pension funds in Canada and regular insurance and reinsurance sector investor, the Canada Pension Plan Investment Board.
The acquisition will reportedly near double Markerstudy’s client base to around 6 million policyholders.
Commenting on the news, Kevin Spencer, group chief executive of Markerstudy, told Sky, “As a leading distributor in the market, taking ownership of BGLi provides us with a unique opportunity to further accelerate and increase our growth potential.
“We have enjoyed a long and fruitful partnership with BGL Group, and this has strengthened in recent years with BGLi acting as an outsource partner to a number of Markerstudy brands.”
Peter Thompson, chief executive of BGL Insurance, also told Sky that the sale was, “a natural evolution for BGLi and brings together our leading digital distribution capabilities with the innovative underwriting capabilities of Markerstudy.”
Sky noted that comparison site Comparethemarket drives the lions share of revenues for BGL and also pointed out that the price being paid by Markerstudy for the rest of its insurance operations is considered below market expectations.