RCS - esure Group plc - esure group plc: Ageas to purchase esure Group

Deutsche Bank AGAnnouncement

14/04/2025 08:15

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RNS Number : 8637E  esure Group plc  14 April 2025

THIS ANNOUNCEMENT MAY CONTAIN INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7
OF THE MARKET ABUSE REGULATION (EU) 596/2014 AND THE MARKET ABUSE (AMENDMENT)
(EU EXIT) REGULATIONS 2019

esure Group plc today announces the following:

 

 

Ageas reaches agreement with Bain Capital to acquire esure and establish a
top-3 UK personal lines platform

 

Ageas and Bain Capital agree GBP 1.295 billion (EUR 1.510 billion) cash
transaction for esure
Combination creates multi-channel motor and home insurer with broad customer
appeal across the UK

 

Ageas announced today that it has reached an agreement with Bain Capital to
acquire esure(1), a leading digital personal lines insurer with strong
positioning on price comparison websites (PCW) in the UK. The proposed
transaction is fully aligned with Ageas's strategic priorities for M&A in
Europe under Elevate27. It increases Ageas's European markets presence through
the acquisition of a controlled entity, reinforces its positioning in the UK,
generates shareholder value from the realisation of synergies and enhances the
cash generation of the Group.

 

The combination of Ageas UK and esure will create the third largest UK
personal lines platform with a balanced and diversified distribution spanning
Direct, PCW, brokers and partnerships. The acquisition of esure will enable
Ageas UK to accelerate the diversification of its distribution strategy into
the important PCW channel in the UK market. Its underwriting footprint will
widen Ageas UK's target customer demographics and enable growth to a top-line
of GBP 3.25 billion (EUR 3.8 billion) by 2028.

 

Ageas UK has established itself as an accomplished insurer over the past four
years by focusing on profitable growth solely in the personal lines business
with a specialism in broker distribution, outstanding technical insurance
skills and technology, and successfully delivering insurance solutions for its
distribution partners and over 4 million customers.

 

esure is a leading UK personal lines insurer with a fully digital distribution
model through the PCW channel and three popular brands - esure, Sheilas'
Wheels and First Alternative. In 2024, esure had more than 2.1 million
policies and GWP of GBP1 billion (EUR 1.2 billion).

 

The acquisition of esure creates significant potential for operational
synergies and capital benefits to be realised in the medium term. Ageas expect
economies of scale in the UK personal lines portfolio and the accelerated
implementation of the EIS IT platform, including esure's complementary claims
module, to drive operational efficiencies and cost avoidance for Ageas UK.
Continued focus on technology, data and AI is expected to create further
competitive advantages. In addition, capital benefits from enhanced
diversification and the inclusion of esure in Ageas's partial internal model
are expected to emerge over time.

 

Under the terms of the transaction, Ageas will pay Bain Capital a cash
consideration of GBP 1.295 billion (EUR 1.510 billion) for esure, respecting a
Solvency II target ratio of 150% as at year-end 2024. The Group's capital
position will remain robust with Solvency II ratio expected to decrease by
approximately only 10pp thanks to the inclusion of around EUR 1 billion of Own
Funds instruments in the financing mix.

 

The transaction will be financed through a combination of surplus cash and
newly issued senior and hybrid debt and/or equity within the existing
authorisations and subject to market conditions. A fully underwritten 2-year
bridge facility is provided by BofA Securities and Deutsche Bank Luxembourg
S.A..

 

The integration of Ageas UK and esure is anticipated to be completed, in all
material respects, during the Elevate27 strategic cycle. Entering the next
strategic period, Ageas project that the transaction will generate a full cost
saving potential in excess of GBP 100 million (c. EUR 115 million) per annum,
before tax. On a run-rate basis, this transaction is expected to generate an
unlevered return on investment of over 12% for Ageas and an uplift in the
Return on Equity of more than 1pp. It will become Holding Free Cash Flow
accretive per share of c. 10% as from 2028.

 

The completion of the transaction is expected to occur in 2H 2025 and remains
subject to regulatory approvals.

 

Commenting on the agreement, Hans De Cuyper, Ageas Group CEO, said: "We are
delighted to have reached an agreement to acquire esure. In recent years,
Ageas has experienced significant growth in the UK, making it an increasingly
important part of the Group. This transaction will allow us to offer
competitive value propositions to a wider customer profile via a multi-channel
distribution model, positioning Ageas UK as one of the top three personal
lines insurers. Acquiring esure also supports our strategic ambitions of
re-balancing our Group profile towards businesses with high cash conversion.
We remain, of course, committed to our Elevate27 financial objectives,
including our commitment to a progressive dividend policy, and will observe
the full synergies of this transaction in the forthcoming strategic period."

 

Ant Middle, Ageas UK CEO, said: "esure is a significant addition to the Ageas
UK business and aligns perfectly with our growth strategy. As demand for motor
and home insurance grows, Ageas will be perfectly positioned to gain market
share and become the insurer of choice for our existing and new customers. The
combined Ageas and esure franchise will benefit from an outstanding customer
offering, through market leading technology and prominent brands, that will
drive our expansion into new customer demographics. Under Elevate27, we want
to continue to grow our broker and partnerships personal lines business in the
UK, and esure will help us to rapidly expand our direct distribution, our
customer reach, and our scale overall. esure's technical capabilities will
match Ageas UK's and will enable us to develop our well-balanced business at
greater pace and serve a wider range of customers. We're really excited for
the potential this brings our UK business and wider Group."

 

David McMillan, esure Group CEO, said: "This transaction brings together two
highly complementary businesses and creates an even stronger platform for
continued innovation, growth and excellent delivery for our customers.
Combining Ageas's scale, financial strength and excellent broker relationships
with esure's strong retail brands, market-leading data capabilities and
strength on PCWs, alongside a shared technology platform, will enhance our
combined ability to invest in our customer proposition and open up new
opportunities for growth. I am deeply proud of what the esure team has
achieved to date. We look forward to working alongside the Ageas team to build
the UK's leading personal lines insurer."

 

Luca Bassi, Partner at Bain Capital, said: "We are pleased to have supported
esure through its transformation and growth journey. During our ownership,
esure has built the leading tech platform in UK insurance and their highly
efficient operations have set a new standard for the industry. This
transaction is a testament to esure's strong market position and the
state-of-the-art technology platform built under Bain Capital's tenure, with
the business now at record levels of profitability. We are confident that
Ageas is the right partner to continue this legacy of success and innovation."

 

BofA Securities is acting as financial adviser and Allen Overy Shearman
Sterling LLP is acting as legal counsel to Ageas in relation to the
transaction.

 

Fenchurch Advisory Partners LLP and Goldman Sachs International served as
financial advisers to Bain Capital and esure. Weil, Gotshal & Manges
(London) LLP served as legal adviser and Norton Rose Fulbright LLP served as
regulatory adviser to Bain Capital and esure.

 

Further information:

 

For Ageas

 

Michaël Vandenbergen, Ageas, michael.vandenbergen@ageas.com
(mailto:michael.vandenbergen@ageas.com) , +3225575736

 

Chris Sibbald / James Leviton, FGS Global, ageas-uk@fgsglobal.com
(mailto:ageas-uk@fgsglobal.com) , +447855955531

 

For Bain Capital

 

Sean Palmer, Camarco, baincapital@camarco.co.uk
(mailto:baincapital@camarco.co.uk) , +447591760844

 

For esure group

 

esure@teneo.com (mailto:esure@teneo.com)

 

For analysts:

 

An analyst meeting regarding this transaction will be held on Monday, April
14, 2025, from 10:00 to 11:00 am CET (9:00 to 10:00 am UKT). The Teams call
can be accessed using the following link: https://ageas.com/en/esure-2025
(https://www.globenewswire.com/Tracker?data=sjQqSjRP7B0-V69uuG0T_GMKi87fJyiEzri-2FjXE86F9eLwB9WZsWAkqB7HARK5pa6IK-aYSJXWMVsGi71ePYyDsA-sjwptr_n0wZ0FCD1NxlQP5ZJ6CHSeVWzdpSof)

 

Note to editors:

 

To support its expansion, in 2024 Ageas UK announced a partnership with Saga,
growing its offering to the over-50s segment, which is strategically in line
with Ageas's focus on an ageing population.

 

Ageas is a listed international insurance Group with a heritage spanning of
200 years. It offers Retail and Business customers Life and Non-Life insurance
products designed to suit their specific needs, today and tomorrow, and is
also engaged in reinsurance activities. As one of Europe's larger insurance
companies, Ageas concentrates its activities in Europe and Asia, which
together make up the major part of the global insurance market. It operates
successful insurance businesses in Belgium, the UK, Portugal, Türkiye, China,
Malaysia, India, Thailand, Vietnam, Laos, Cambodia, Singapore, and the
Philippines through a combination of wholly owned subsidiaries and long-term
partnerships with strong financial institutions and key distributors. Ageas
ranks among the market leaders in the countries in which it operates. It
represents a staff force of about 50,000 people and reported annual inflows of
EUR 18.5 billion in 2024.

 

esure Group is one of the UK's leading providers of Motor and Home insurance
products through the esure, Sheilas' Wheels and First Alternative brands.
Founded in 2000, esure Group has the scale, heritage and expertise capable of
inspiring the trust and confidence of their 2.1m customers, combined with the
entrepreneurial mindset and agility of an insurtech. esure Group is focused on
using their market-leading technology platform, insights and data, alongside
fantastic customer service, to deliver more personalised experiences that meet
the evolving needs and expectations of customers.

 

Founded in 1984, Bain Capital is one of the world's leading private investment
firms. The firm has a significant history in Europe, starting with the
establishment of a London office in 2000 and expanding to include other
European locations, with a focus on private equity, credit and special
situations investments. We are committed to creating lasting impact for our
investors, teams, businesses, and the communities in which we live. As a
private partnership, we lead with conviction and a culture of collaboration,
advantages that enable us to innovate investment approaches, unlock
opportunities, and create exceptional outcomes. Our global platform invests
across five focus areas: Private Equity, Growth & Venture, Capital
Solutions, Credit & Capital Markets, and Real Assets. In these focus
areas, we bring deep sector expertise and wide-ranging capabilities. We have
24 offices on four continents, more than 1,850 employees, and approximately
$185 billion in assets under management. To learn more, visit
www.baincapital.com. Follow @BainCapital on LinkedIn and X (Twitter).

 

Bank of America Europe DAC ("BofA Securities") is acting as financial adviser
exclusively for Ageas and for no one else in connection with the transaction
and will not be responsible to anyone other than Ageas for providing the
protections afforded to its clients or for providing advice in relation to the
transaction or any other matters referred to in this announcement.

 

 

(1) Under the terms of the transaction, Ageas will acquire 100% of the issued
and to be issued share capital of Blue (BC) Topco Limited, a holding company
for esure Group plc and its subsidiaries.

 

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