Mid-market private equity firm LDC has exited its investment in Yorkshire-based outsourced insurance services provider Direct Group in a deal advised on by Clearwater International.
Direct Group, based in Doncaster, has been acquired by Ryan Specialty Group (RSG), a US-based insurance services group owned by Pat Ryan, the founder of Aon Insurance. RSG is a global organisation consisting of wholesale brokerage, underwriting managers and other specialty insurance services to agents, brokers and insurance carriers.
The transaction, in which Clearwater International advised LDC, has now received regulatory approval from the Financial Services Authority. LDC backed a management buyout of Direct Group in 2007. Since then the business has made four strategic acquisitions to diversify its outsourced services offering, including insurance broker Millennium in 2008 and Evander Validation Services business in 2010. In April this year it acquired laptop and mobile inspection specialist Circuit, followed by Simple Insurance in June. The strategy has driven sales growth of over 100% since the LDC-backed MBO. Turnover is currently around £20 million and headcount has increased from 70 to 450.
Ryan Specialty Group said the deal would significantly strengthen its managing general agent (MGA) and third party administration (TPA) capabilities in the UK. Direct Group delivers a range of MGA and TPA services across the insurance industry and provides solutions to financial institutions, corporates and affinities.