UK private equity firm Livingbridge has agreed to buy a majority stake in Chill Insurance, marking a second Irish deal by the London-based firm in a week.
The acquisition, signed on Tuesday, will see current owners, brothers Pádraig and Séamus Lynch, retain a stake of about 30 per cent, according to sources. While they declined to discuss financial details, industry sources had put a value of as much as €100 million on the business earlier this year when speculation was rife that it was on the block.
Livingbridge said in a statement on Wednesday that the transaction builds on its extensive experience in the insurance sector. This includes its current investment in UK insurance broker Jensten Group and previous holding in Kingsbridge Risk Solutions, a specialist broker.
Chill Insurance had denied that it was up for sale when contacted by The Irish Times in February, saying that US investment bank Keefe, Bruyette & Woods (KBW), which had been hired to advise the company, was looking at debt financing options to help fund growth plans. Pádraig Lynch said at the time that an equity raise was not on the cards.
Sources said that KBW subsequently received bid interest in Chill Insurance, and that this route proved more compelling as the Covid-19 pandemic began to play out across the economy and financial markets. The Sunday Times reported last month that Livingbridge was circling Chill Insurance.
It is understood that Chill Insurance is in talks on two potential deals, with one said to be at an advanced stage.
Chill Insurance was founded in 2006 by the Lynches, and has subsequently grown into the largest independent personal lines insurance broker in Ireland with over 200,000 policyholders, representing a 6 per cent market share. It is led by chief executive Michael McLaughlin and employs almost 250 staff.
Growth journey
“We are excited by the prospect of partnering with Livingbridge on the next stage in our growth journey,” said Mr McLaughlin. “We have been impressed by their successful track record in scaling insurance businesses, and their expertise will be invaluable as we continue to widen our reach in the personal lines sector, expand our portfolio of complementary financial services products and build our M&A [mergers and acquisitions] capability.”
Consolidation in the consumer-focused area of insurance broking is behind that in corporate broking.
Arachas, an acquisitive corporate broker in recent years, changed hands itself in recent months, with US private equity firms HPS Investment Partners and Madison Dearborn acquiring a controlling interest in a deal that valued the business at a reported €250 million. Arachas closed a deal in recent weeks to buy Dublin-based broker O’Driscoll O’Neill.
Last week, Livingstone bought a majority stake in Galway-based cyber security company TitanHQ, which protects more than 8,500 businesses, including Virgin, O2 and Pepsi.
