Unquote

Deal in Focus: BC-backed Sabre floats with £575m market cap

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BC Partners-backed motor insurance underwriter Sabre Insurance Group has floated on the London stock exchange with a market cap of £575m.

The IPO, which priced shares in the company at 230 pence apiece, raised £287.5m. Of the amount raised, £206m will be used to acquire shares owned by Angus Ball, Keith Morris and BC (which also owns Acuris, the parent company of unquote"). Any additional fresh capital generated from the listing will be used to pay commissions, fees and expenses related to the process.

It is understood the GP has sold around half its stake in Sabre and will retain a stake of around 30% following the listing.

Under BC's tenure, the business introduced a management team led by CEO Geoff Carter and chief financial officer Adam Westwood to take over from the founding owners. It also invested in product development and bolted on Binomial Group in 2014.

The partial divestment came just a week after another BC-backed company, Springer Nature, enlisted JP Morgan and Morgan Stanley to prepare an IPO on the Frankfurt stock exchange, in what is anticipated to be a €4-5bn flotation.

The European IPO market appears to have reopened somewhat this year, following a quiet 2016. With just under one month of the year remaining, there have already been 38 private-equity-backed flotations in 2017, compared to just 28 in the whole of 2016, according to unquote" data. However, the figure still remains considerably short of the 52 seen in 2015 and 83 witnessed in 2014.

The Sabre IPO comes the day after Trilantic Europe-backed Gamenet, an Italian betting and online gambling group, listed with a €225m market cap. Other recent flotations include, IK Investment Partners-backed Danish kitchen manufacturer TCM Group, which listed with a market cap of DKK 980m, and VC-backed Danish biotechnology company Orphazyme, which floated with a market cap of DKK 1.6bn.

Shares owned by BC Partners and other shareholders are subject to customary lock-up arrangements, while the listing also includes a 10% overallotment option.

Barclays Bank and Numis Securities acted as joint global coordinators, joint bookrunners and joint sponsors in the Sabre listing, while Joh Berenberg & Co and Peel Hunt acted as co-lead managers. 

Previous funding
The listing comes four years after BC acquired the company in a deal understood to be valued at £240m, with capital drawn from the €6.5bn BC European Capital IX fund.

Company
Headquartered in Dorking, Surrey, Sabre was founded in 1982 and has a headcount of 150. The business distributes policies through third parties and its own brands, Go Girl, Insure2Drive and Drive Smart, with the latter accounting for 30% of gross written premiums (GWP) in 2016.

Sabre generated GWP of £197m in 2016 and reported a compound annual growth rate of 11.3% from 2006 to 2016, according to a statement issued at the time of the company's announcement of its intention to float. It generated adjusted profit after tax of £53.9m in the same year, up from £37.1m in 2015 and £48.9m in 2014.

People
Sabre Insurance Group – Geoff Carter (CEO); Patrick Snowball (chairperson).

Advisers
Company – Evercore Partners (corporate finance).

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