Travelers to buy UK business insurance provider Simply Business
The Travelers Companies has agreed to acquire UK-based business insurance provider Simply Business for nearly $490m from Aquiline Capital Partners.
The purchase price also covers debt repayment besides other obligations at the time of closing.
Simply Business distributes small business insurance policies in the UK, providing products on the internet, representing a wide panel of carriers. It had recently forayed into the US market.
The company is claimed to have over 425,000 microbusiness customers, spanning across 1,000 classes of business.
Insurance premiums, through the last three years, placed by the company are said to have grown at a compound annual rate of around 17.5% to £93m in 2016.
Travelers business insurance executive vice president and president Greg Toczydlowski said: “We are very pleased to be partnering with Simply Business, a dynamic and innovative company that has recently established early stage operations in the United States.
“Over time, we expect it will provide us with efficient access to serve the substantial microbusiness market in the United States and potentially other geographies.”
Toczydlowski added that Simply Business will continue to run as an independent business and continue its partnership with its panel of carriers under its own brand.
Simply Business CEO Jason Stockwood called the acquisition to be a tremendous opportunity for the company and employees apart from representing a strong validation of its business model.
Stockwood added that the shared values and commitment to innovation among Simply Business and Travelers made the deal a perfect fit.
The acquisition, which is likely to close in the third quarter, will be financed through debt financing and internal resources by Travelers based on market conditions.
The deal is subject to regulatory approvals as well as customary closing conditions. Travelers stated that the transaction will have minimal impact on its earnings per share for both 2017 and 2018.
Image: Travelers Tower in Hartford, Connecticut, US. Photo: courtesy of John Phelan/Wikipedia.org.