Thursday 19 September 2019

Sabre Insurance set to raise £213 million in London IPO

The listing is expected to value the firm at around £600 million.

London Stock Exchange
London Stock Exchange

By Kalyeena Makortoff, Press Association City Reporter

Sabre Insurance has announced plans for a London flotation that is expected to raise up to £213 million, valuing the UK firm at around £600 million.

The December Initial Public Offering (IPO) comes five years after private equity group BC partners acquired Sabre – known for products including Drive Smart, Insure 2 Drive and Go Girl – for £240 million in 2013.

BC Partners will remain a significant shareholder in the business, but will not be a majority shareholder following the listing – which could value the firm at up to £600 million.

The company was considering a number of options including a private sale, but chief executive Geoff Carter confirmed that flotation was preferable, as it would safeguard the firm from a potential overhaul under new owners.

“We’ve had quite a good look at various options. The reason we like the IPO, and it’s our preferred option, is we have a very successful strategy and this seems to be to us the best way of continuing to follow and evolve that strategy.”

But he assured that the decision to float was not for lack of interest from private buyers.

“We had plenty of people who were extremely interested, our view is that the IPO is the best way going forward.”

The business has experienced growth of around 10% in recent years, and Mr Carter said that the company is set for “high single digit growth” going forward.

The company generated gross written premiums of £197 million in the year December 1, 2016, and had an average of 325,000 policies in force over that period.

The IPO comes as a surprise after at least two firms decided to hold fire on their respective listings earlier this month amid high market uncertainty.

TV and mobile infrastructure firm Arqiva “postponed” plans for a £6 billion listing at the start of November, saying that it would revisit the flotation “once IPO market conditions improve”.

Had it gone ahead, it would have been one of the biggest listings this year.

Bakkavor, the UK’s biggest maker of hummus, last week said it was pressing ahead with its flotation, which came just days after saying that the transaction would not be in the best interest of shareholders given volatility in the IPO market.

It is understood that the group U-turned on its decision after discussions with investors.

Business services provider TMF Group also ditched plans for an IPO in October, opting instead for a sale to private equity firm CVC Capital.

Mr Carter said that Sabre had spent “quite a lot of time” speaking to investors in recent weeks and was confident in the IPO after seeing “quite a strong level of interest.”

“As an investment case we’re quite differentiated from some of the ones who have been on the market.

“We’re highly cash generative, we’ve got a long track record of profitability and growth, and we don’t have any adverse features, there’s no debt … so we see investors being quite interested in this.”

The flotation is expected to take place in mid-December.

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