European buy-out firm Cinven is to buy UK-based Guardian Life Insurance from Dutch pensions giant Aegon for £275m.
In an auction hosted by Goldman Sachs, Cinven reportedly beat private equity firm Apollo Global Management and reinsurer Swiss Re to the post, which had also expressed interests in acquiring the company.
Guardian was established as a life and pensions business in 1821 and renamed Guardian Assurance in 1902. A merger with Royal Exchange Assurance in 1968 created the Guardian Royal Exchange Group, the life and pensions businesses of which were acquired by Aegon UK in 1999.
Following the acquisition, the company has been closed for new business but has more than half a million legacy customers on its books. It has over 300,000 policies and around 170 employees.
“Cinven’s financial services team has invested considerable time into developing its strategy for the closed life market and believes it represents an excellent investment opportunity with attractive returns,” said Caspar Berendsen, a partner at Cinven.
“Guardian is an ideal entry point for us into the market and provides us with a strong platform from which to deploy further capital to create a leading closed life consolidator,” he added.
The acquisition of Guardian provides Cinven with an entry point into the UK closed life market and a strong platform from which to execute a consolidation strategy for the sector, the firm said.
The deal represents the third financial services investment through Cinven’s current fund, the first two being Partnership Assurance, a provider of enhanced annuities to retirees in the UK, and Avolon, a which provides aircraft lease finance.
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