Hg refinances A-Plan for second time in 19 months

Kenny Wastell
30 January 2019

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Hg has completed the refinancing of portfolio company A-Plan, a UK-headquartered insurance brokerage.

The transaction brings the total proceeds generated from the A-Plan investment to around £200m for Hg7, around 1.3x original cost, with no sell-down in the vehicle's equity stake.

HgCapital Trust, which invests alongside the firm's flagship vehicles, will generate £13.7m from the latest transaction.

The development comes 19 months after Hg secured a £170m refinancing for A-Plan and just weeks after the business acquired Cheltenham-headquartered Endsleigh from its corporate parent Zurich for an undisclosed sum.

The 2017 refinancing was used to repay the business's original debt and enabled Hg to take out a dividend of undisclosed size.

According to a statement, Hg7 has now returned around 60% of invested capital to its LPs and had a gross IRR of 25% as of September 2018.

The statement also revealed that A-Plan has generated double-digit earnings growth over the course of the last four years.

Previous funding
A-Plan first received private equity backing in 2008, when Equistone acquired a 68% stake in the business in a deal that saw Fortis Bank providing a £60m debt package.

HgCapital then acquired A-Plan for an enterprise value of around £300m in 2014, with Equistone understood to have made 2.8x money from the sale.

Company
Founded in 1963 and headquartered in Oxford, A-Plan is an insurance brokerage, arranging cover including SME commercial, automotive, home and high-net-worth insurance.

People
A-Plan – Carl Shuker (CEO).