Private Equity Firm Cinven and Canada’s BCI to Buy Legacy Specialist Compre

Cinven, an international private equity firm, and British Columbia Investment Management Corp. (BCI), one of Canada’s largest institutional investors, announced they have reached an agreement to acquire Compre, a specialist global consolidator of closed books of non-life insurance policies, from CBPE Capital LLP.

Financial details of the transaction are not disclosed.

Compre is focused on the acquisition and management of discontinued non-life insurance portfolios (also known as run-off portfolios). The company has operations in the UK, Bermuda, Finland, Germany, Malta and Switzerland.

The global non-life insurance run-off market is growing steadily, driven by insurers’ increasing focus on balance sheet optimization, capital efficiency and disposals of non-core business lines. Compre has a proven track record of acquiring portfolios from major institutions including Allianz, Generali, HSBC and Swiss Re. Founded in 1991, Compre employs approximately 80 people.

Cinven and BCI said Compre is an attractive investment opportunity because of:

• Compre’s high-quality, cash and capital-generative business model, that delivers highly predictable long-term profits, with significant downside protection;
• Its strong and established market position in the European non-life insurance legacy market and, more recently, its growing market position in the U.S. market through its Bermuda platform, with further ambitions to enter the Lloyd’s market going forward;
• Its track record of acquiring and managing non-life legacy businesses over more than 30 years, comprising 11 company acquisitions and 39 portfolio transactions across various jurisdictions across Continental Europe, the UK and the U.S.;
• Its proven financial track record of steady and consistent growth in recent years, delivering robust performance through the COVID-19 pandemic and prior downturns;
• The significant opportunity to capitalize on the increasing demand for legacy solutions and offer its products to a broader range of international clients; and
• An exceptional management and leadership team, led by CEO Will Bridger, with significant expertise across its specialist areas.

The Compre transaction represents the second investment from Cinven’s new financial services sector-focused strategy, which will be focused on similar long-term investment opportunities across Europe.

Cinven Funds’ previous investments in the European insurance sector include Guardian Financial Services in the UK; Eurovita in Italy, and Viridium in Germany. Cinven recently announced an agreement to acquire specialist insurance broker Miller from Willis.

Other financial services investments by the Cinven Funds include Partnership Assurance, NewDay, Avolon and Premium Credit.

BCI has made a number of investments in financial services companies, including Hayfin Capital Management, Verifone, and BMS Group.

“Over the last 30 years Compre has built a proven platform in the highly specialized insurance and reinsurance run-off market, and a reputation amongst its clients for consistently creating and realizing value,” commented Luigi Sbrozzi, partner of Cinven.

“Compre is extremely well placed to access new growth markets, such as the U.S. and Lloyd’s, and to broaden its client offering further. We look forward to working with Compre’s management team to deliver these growth opportunities, drawing on the deep expertise of the Cinven team in the insurance sector,” Sbrozzi added.

“We are impressed by the quality of the platform built by Will Bridger and his team and are excited to partner alongside Cinven to support the continued growth of the business. BCI’s investment in Compre follows as a result of our proactive, sector focused origination strategy and relationship building efforts with the company,” said Jim Pittman, executive vice president and global head, Private Equity, BCI.

“We look forward to supporting Compre in its development and in turn providing attractive and stable long-term risk-adjusted returns for our pension plan and insurance fund clients,” Pittman continued.

“This has been a historic year for Compre. We completed our first U.S. transaction, launched our Bermudian reinsurer and now, subject to regulatory approval, have new shareholders supporting further growth of the business,” said Will Bridger, CEO, Compre.

“This was made possible through the commitment of everyone at Compre and our drive and determination for what we do. The legacy market is on an exciting trajectory and, together with our new shareholders, we will be best placed to deliver the ambitious plan we have for Compre.”

The transaction is expected to complete in Q2 2021 and is subject to regulatory approvals.

Cinven and BCI advisers included: Macquarie Capital (M&A); Allen & Overy and Latham & Watkins (legal); PwC (commercial, financial, actuarial, operations, IT); FTI Consulting (actuarial, operations, IT, communications); Deloitte (tax, structuring) and Marsh (insurance).

Management advisers were Liberty Corporate Finance (financial adviser) and DLA Piper (legal and tax).

Topics Mergers & Acquisitions Canada