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HIG nets 20x return on sale of auto insurer Safe-Guard to Goldman Sachs

2 Jan 2013

HIG Capital has completed the sale of car finance and insurance provider Safe-Guard to Goldman Sachs, in a deal that is reported to have made the Miami-based firm a 20-times return on its initial investment.

The firm bought into Safe-Guard through a $60m to $70m debt recapitalisation in 2007 and made $375m through the sale, according to Dow Jones, which cited a person familiar with the deal.

HIG managing director Bret Wiener said Safe-Guard had almost tripled its annual revenue since the firm’s investment.

The Atlanta, Georgia-based company, which was founded in 1992, also provides finance and insurance products for the recreational vehicle, marine and motorcycle markets.

Safe-Guard CEO Randy Barkowitz said, “HIG has been a tremendous partner to Safe-Guard and has been instrumental in helping us develop and execute our growth strategy.

“Over the last five years we’ve invested in our team, our infrastructure and our program offerings, and Safe-Guard is now the clear ancillary F&I industry leader.”

HIG is reportedly targeting $1bn for its latest buyout fund, HIG Capital Partners V, according to Reuters.

It completed its last fundraise in September 2006 by closing its fourth fund on $750m.

The firm limited the size of its previous fund to $750m and only made it available to existing HIG investors to continue its focus on small and mid-market businesses, co-founder Tony Tamer said at the time.

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