UK motor insurance specialist Markerstudy Insurance will acquire the insurance operations of BGL Group, in a deal worth £400m, according to a report from Sky News.
The acquisition of BGL Insurance, which is owned by the group behind the Comparethemarket price comparison platform, will effectively double Markerstudy’s customer base to 6 million.
Marketstudy reportedly became the UK’s sixth largest motor insurer two years ago with the acquisition of Co-op Insurance’s underwriting businesses.
The price being paid by Markerstudy, which is expected to be funded in part by a capital injection from Pollen Street Capital, its private equity backer, is below market expectations when BGL Group appointed bankers from Fenchurch Advisory Partners in the autumn.
However, it is understood that the deal also includes potential further payments which could take the eventual price to more than £500m.
In response to an enquiry from Sky News, Kevin Spencer, group chief executive of Markerstudy, said: “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.â€
Peter Thompson, chief executive of BGL Insurance, said the deal was a natural evolution for BGLi and brings together the company’s leading digital distribution capabilities with the innovative underwriting capabilities of Markerstudy.
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