GOLDMAN Sachs’ merchant banking division yesterday bought half of British motor insurer Hastings in a deal that values the company at £700m.
The Sussex-based insurer has previously made a point of handing shares to its staff, meaning thousands of employees are now set to enjoy a bumper payday.
Goldman’s merchant banking arm will finance the purchase through a mix of equity and new debt financing and is thought to have invested around £150m in return for its stake.
The team that led the management buyout of Hastings in 2009 from Insurance Australia Group will retain the other half of the company.
“Hastings has a unique business model, well equipped for the digital age, with ambitious targets for continued growth,” said Goldman’s Sumit Rajpal. “We have been extremely impressed by the quality of the Hastings management team and by what they and the founding shareholders have achieved over the past few years.”
Hastings had 1.3m customers in June 2013, up 17 per cent year-on-year. It hopes to insurance one in ten UK drivers by 2020. Gross premiums were £444.1m and it produced adjusted profits of £83.3m.