Epiris in £90m exit of Davies Group to HGGC

Mikkel Stern-Peltz
30 January 2017

Tweet
Facebook
LinkedIn
Google plus
Send to

Epiris Managers т formerly Electra Partners т has sold UK-based claims management specialist Davies Group to US mid-market private equity firm HGGC in a ТЃ90m EV deal.

The transaction returns £45m of proceeds to listed fund Electra Private Equity, representing a 4% increase in the September 2016 valuation of Davies Group, Epiris said in a statement. NAV per share of the listed private equity portfolio increased by 4 pence as a result.

Davies Group CEO Dan Saulter and chief claims officer Darren Coombes will continue to manage the company and remain significant minority shareholders.

Epiris's exit comes around five-and-a-half years after it acquired Davies Group from LDC. HGGC becomes the third private equity owner of the London-based business.

According to an Epiris spokesperson, the GP supported seven add-on acquisitions during its time as owner of Davies Group. Liability loss adjuster Garwyn Group was bolted on in December 2013, while property and liability loss adjusting business Argent was acquired two years later. In July 2015, Davies acquired Motor Fleet Services, a provider of commercial motor claims handling services.

Previous funding
Epiris – then Electra – became a majority shareholder in Davies Group in October 2011, leveraging its Electra Private Equity and Electra Partners Club 2007 vehicles to provide £49m of equity in the £61m EV secondary buyout.

Incumbent backer LDC fully exited its stake in Davies Group, generating a money multiple of 3.5x and an IRR of 45% from Epiris's acquisition.

LDC had backed the £27m management buyout of Davies Group in February 2008, providing £8.6m of equity for a majority stake, according to unquote" data.

Company
Davies Group is a claims management company acting on behalf of insurers, service companies and brokers.

As well as claims management, the firm also offers validation and loss adjusting services and claim fulfilment. According to HGGC and Epiris, Davies Group provides claims and insurance services to more than 100 clients across the UK and Ireland, and manages 170,000 claims a year.

The company employs a staff of 580.

People
Epiris Managers – Alex Fortescue (managing partner); Nicola Gray (investment manager).
HGGC – Rich Lawson (CEO, co-founder).
Davies Group – Dan Saulter (CEO); Darren Coombes (chief claims officer).