The UK’s Liverpool Victoria Friendly Society announced that it has entered into a conditional agreement to acquire Britannia Rescue from the Civil Service Motoring Association (CSMA), subject to the approval of its members and from regulatory authorities.
Liverpool Victoria summarized the “key features of the proposed transaction” as follows:
— The total value of the transaction is estimated to be approximately £36 million [$71 million), of which £18 million [$35.4 million] will be paid in cash to CSMA on completion. The transaction will also release an estimated £8 million [$15.7 million] of value currently held within the existing underwriting vehicle, which will be retained by CSMA.
— Liverpool Victoria will become the preferred provider of roadside rescue and recovery services to CSMA members.
— Liverpool Victoria will remain the preferred supplier of insurance and other financial services products to CSMA members.
— The transaction is conditional on approval by the members of CSMA at an Extraordinary General Meeting to be held on 20th March 2007. A Circular setting out details of the proposed sale is expected to be posted in February to CSMA members.
— The transaction is expected to be completed in early April.
— The transaction will be achieved through the acquisition by Liverpool Victoria of the entire issued share capital of Motoring & Leisure Services Limited, the wholly owned subsidiary of CSMA that owns and operates Britannia Rescue.
The bulletin noted that “Britannia Rescue is the UK’s fourth largest roadside rescue provider with approximately 300,000 customers. Britannia Rescue reaches around 50 percent of breakdowns within 30 minutes and 92 percent within one hour, one of the best performance records in the industry. In 2006 it was named ‘best buy’ for road rescue services for the third consecutive time by the UK’s leading consumer research organization.”
Liverpool Victoria’s stated ambition is “to grow its general insurance business over the next five years, and this acquisition fits with those plans. In Sept. 2006 it set up a “new general insurance management team, headed by John O’Roarke, former Managing Director of Churchill Insurance.
The Group’s Chief Executive Mike Rogers commented: “This acquisition is an excellent opportunity for us to broaden the range of products we offer to our customers, with the addition of a market leading and excellent value road rescue offering. We already offer Britannia Rescue services to our motor insurance customers.
“We plan to invest in the Britannia Rescue brand to build awareness and market share of direct business. We will also offer greater choice in the market to brokers and to our existing and potential corporate partners, as a provider of competitive white-label road rescue services.”
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