Esure founder Peter Wood buys stake for £185m
Lloyds Banking Group has sold 70% of its stake in Esure, the online insurer, to a management buyout vehicle to be called Esure Group Holdings Ltd, led by Esure chairman and chief executive Peter Wood.
The stake has been sold for a cash consideration "slightly in excess" of £185m.
As at 31 December 2008, esure had gross assets of £975.5m (including assets backing insurance liabilities).
Esure, which includes the Sheilas’ Wheels brand, was founded in 2000 as a joint venture by Peter Wood and the then Halifax plc. Esure staff will continue to be employed by Esure Services Ltd.
Archie Kane, group executive director of insurance at Lloyds Banking Group said: "This sale means we can focus our efforts on our core general insurance brands of Halifax and Lloyds TSB.
"Our priority is to deliver strong insurance products and excellent customer service across the general insurance business, thereby reinforcing our reputation as a market-leading insurance provider."
Funding for the buy-out was obtained through Tosca Penta Investments LP, a new private equity vehicle raised and managed by Penta Capital.
Peter Wood said: “I am delighted that we have managed to reach a mutually beneficial agreement with Lloyds Banking Group for esure management and external investors to buy-out Lloyds’ majority shareholding. When I set up esure with Halifax plc as joint venture partner in 2000, no-one could have foreseen the events that would lead to Lloyds Banking Group – who already offer car and home insurance successfully – taking on that role.
“This move creates a clean base for both companies to move forward pursuing their own insurance strengths unfettered. The agreement marks the start of a long period of hard work for everyone at esure but we will relish this challenge.”
