Barclays PE gets money back on Admiral

Barclays Private Equity has seen the full repayment of its investment in UK car insurance group, Admiral. The group has negotiated a £80 million refinancing deal, jointly underwritten by Bank of Scotland Corporate Banking and Lloyds TSB Corporate Acquisition. The capital will allow Admiral to continue its growth and pay its post-MBO debt. Barclays retains its entire shareholding in the group.

Barclays Private Equity supported the original £110 million MBO in November 1999. Based in Cardiff and Swansea, Admiral launched ten years ago as a direct motor insurer for those motorists that traditionally pay higher than average premiums, including drivers under-35 and living in big cities. Since then, it has established itself as one of the country’s most successful direct insurers, with six brands, Admiral, Bell, Diamond,, Gladiator Commerical and The group now has over 680,000 customers.

Andrew Murtagh of Barclays Private Equity said: “We haven’t sold any of our shareholding in Admiral. The business has performed well and we have taken the opportunity to refinance the original debt from the buyout in 1999. So we have repaid the original borrowings and have also been able to obtain repayment of our original investment in the deal.”

Following September 11, the insurance sector in particular has taken quite a battering and Admiral has done well given tough market conditions, he said. “This has actually allowed us complete flexibility on our exit time frame and we now have the opportunity to borrow more capital for expansion.”

Ian Aston, director of Bank of Scotland structured finance commented on the refinancing: “Admiral is a real success story. In less than ten years it has grown from a zero base to a four per cent market share. Admiral came to us to seek a refinance to give it the flexibility to continue its exceptional growth.”