Hg sells A-Plan to trade buyer Howden

This transaction values Hg Capital Trust's current investment in A-Plan at £21.5m. The trust is a listed vehicle that invests alongside Hg's funds. The transaction value represents an uplift of £3.2m (18%) or 1 pence per share over the carrying value of £18.3m in the net asset value of the company at 31 August 2020.

During Hg's holding period, A-Plan more than doubled its revenues and now has 1.3 million policies compared with 600,000 at acquisition, according to a statement. The company also made 56 add-on acquisitions, while the company's headcount doubled.

A-Plan was part of the portfolio of Hg 7, which closed on £2bn in April 2013. The fund has made several realisations to date, including Kinapse, Leasedrive and the Foundry.

Previous funding
Equistone acquired a majority stake in A-Plan in May 2008, taking a 68% shareholding while management took the balance. Fortis Bank provided a debt package totalling £60m for the management buyout, according to Unquote Data.

At the time of Equistone's acquisition, A-Plan employed 380 staff and generated £44m in revenues.

Equistone Partners Europe sold its majority shareholding in A-Plan in 2014 in a secondary buyout to Hg after a six-year holding period. Equistone is understood to have made 2.8x money from the sale, which was said to be worth around £300m.

In 2017, Hg secured a £170m refinancing for A-Plan, consisting of two term loan B facilities worth £98.8m and £66.2m, and a revolving credit facility of £5m. ING, HSBC, Bank of Ireland, RBS, SMBC, AIG, NIBC and Guggenheim Partners were mandated to arrange the debt refinancing.

The loans both had a tenure of five years and three months, while the revolving credit facility has a term of four years and three months. Leverage following the refinancing stood at 4.9x.

The firm secured another refinancing for the company in 2019. The transaction brought 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.

Company
Founded in 1963 and headquartered in Oxford, A-Plan is a provider of insurance products to policy holders from several different types of insurer, including SME commercial, motor and home, and high-net-worth. It employs more than 2,000 people. For the year ending on 28 February 2019, the company reported adjusted EBITDA of £35.9m and revenues of £161m.

People
Hg – Thorsten Toepfer (partner).
A-Plan Group – Carl Shuker (CEO).

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