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Barclays Private Equity to sell FirstAssist Insurance Services for £71m

27 Sep 2011

Ninth exit for Barclays Private Equity in nine months
Barclays Private Equity (‘BPE’), one of Europe’s leading mid-market private equity firms, today announces the sale of FirstAssist Insurance Services Limited (‘FirstAssist Insurance’ or ‘The Company’), a leading provider of bespoke insurance solutions, for £71m, to Cigna (NYSE: CI), a global health service and financial company providing an integrated suite of health, life and accident services.  

FirstAssist Insurance Services is a principal UK white labelled insurance provider, employing 480 people at its headquarters in Sutton, Surrey and offices in Plymouth and Bournemouth. The Company delivers travel, budget health, protection and legal insurance products for financial institutions, retailers and affinity groups to provide to their customers mainly under their own brands. Before-the-event (BTE) legal expenses insurance and other legal protection products and services are provided through FirstAssist Legal Protection Ltd which is another company in the Group. FirstAssist Insurance Services has significant expertise in developing and maintaining profitable, long-term partner relationships and its clients include many household names.

BPE retains ownership of the after-the-event legal expenses provider FirstAssist Legal Expenses Insurance Ltd which was demerged from the Group in February 2011. After-the-event (ATE) legal expenses is a specialist policy marketed through solicitors.

FirstAssist Insurance Services was acquired by BPE and its management team in 2003 as part of the larger £147m management buyout of FirstAssist Group from Royal & Sun Alliance. BPE has driven a programme of significant structural and strategic change. The business initially offered a range of products covering private medical insurance, budget health and travel insurance, legal expenses insurance and Health and Wellbeing services to corporates and insurers. The Private Medical Insurance division was sold to Standard Life Healthcare in 2006 for £25m, and the Health and Wellbeing services provider FirstAssist Services Holdings was sold to Capita plc for £12.5m in 2010, after a turnaround from losses to profits.

Under BPE’s ownership, FirstAssist Insurance Services has strengthened its personal and commercial product range, focusing on tailoring insurance products for white label clients and offering a seamless outsource insurance operation. In its financial year to 31 December 2010, the holding company for FirstAssist Insurance Services reported operating profit of £5.8m on net earned premiums of £153m.

BPE’s investment in FirstAssist Group was made by BPE Fund I and the exit of FirstAssist Insurance Services represents the 35th successful exit from that Fund, which has generated strong returns for its investors. It is the ninth successful exit in as many months for BPE which has also realised investments in Converteam, Femcare, Gerflor, Jack Wolfskin, Karavel-Promovacances, Martek Power Group, Siteco and Webhelp.

Commenting on the deal, Martin Totty, Group Managing Director of FirstAssist Insurance Services said:

“Barclays Private Equity has been an excellent partner in developing the business over the last eight years, supporting us in building a profitable, sustainable business. We have made great strides in the travel insurance sector, gaining market share and improving profitability. Cigna is an excellent new owner of the business, bringing access to wider distribution and additional product lines and a long term commitment to growing the business further as well as extending FirstAssist propositions to other Cigna markets. ”

BPE Director Catherine Wall, based in BPE’s Birmingham office, said:

“The sale of FirstAssist Insurance Services represents the near total disposal of our original 2003 investment, and we are pleased with the results of our investment strategy to split the business into more specialist separate companies, and to find different buyers for each of them.”

This exit was led by Catherine Wall and Andrew Backen of BPE, the original investment was led by Owen Clarke. They were supported by Sue Woodman, internal legal counsel. Completion is subject to standard regulatory clearances. BPE was advised by Clifford Chance (legal); Hawkpoint (financial adviser); PwC (financial due diligence); KPMG (actuarial due diligence). Cigna was advised by Hogan Lovells (legal). FirstAssist Insurance was advised by Grant Thornton (tax) and Travers Smith (legal).  

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