Cinven Partners LLP, a London-based private equity firm, said it will reap seven times its investment in U.K. annuity provider Partnership Assurance Group Plc’s initial public offering.
The stock sale will give Partnership a market value of 1.54 billion pounds ($2.4 billion), making it eligible for inclusion in the FTSE 250 Index, the company said in a statement today. Cinven sold about 300 million pounds of shares in the IPO and will keep a 52 percent stake valued at 800 million pounds.
Cinven bought Partnership for 158 million pounds in August 2008 from London-based Phoenix Equity Partners, financing the investment entirely with equity from its fund. It’s taking the insurer public after motor insurer Esure Group Plc raised 604 million pounds in an IPO in March and Royal Bank of Scotland Group Plc raised about 1.3 billion pounds by selling stakes in Direct Line Group Plc, Britain’s biggest home and motor insurer.
“Partnership has been a strong investment for Cinven,” Peter Catterall, a partner at Cinven, said in an e-mailed statement. “Cinven will remain a significant shareholder in Partnership in order to continue participating in its future growth.”
Annuities combine elements of investment and insurance products by offering guaranteed annual payouts to retirees. The company’s operating profit rose 42 percent to 112 million pounds in 2012.
Partnership Assurance sold 32.5 million new shares for 385 pence each in the offering to raise about 125 million pounds to pay down debt. The insurer’s owners sold 94 million shares, and Cinven may sell a further 19 million shares through the overallotment option.
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