Barclays Private Equity sells Direct Group for £40 million

Direct Group, a provider of corporate and affinity services to the insurance sector, has been sold by Barclays Private Equity to Lloyds Development Capital in a deal that values the company at £40 million.

Direct Group provides a range of value-added services to insurers and corporate partners, including policy administration and fulfilment, commission management, premium collection, claims handling and performance reporting.  Based at sites in Doncaster and Halifax the business launched in 1990. It works across the product sectors of property, motor, life and casualty, focussing predominantly on property and protection insurance schemes.  

Since the original deal with Barclays Private Equity in 2002, the business has doubled its EBITA and increased its spectrum of blue chip retail partnerships without significant increases in FTE’s through careful investment in automated workflow systems.  

The two founder managers, Nigel Clack and Geoff Woodhead, have exited the company as part of the deal.  The company is being taken forward under the leadership of Derek Coles, who joined the company as Managing Director in 2006, and Scott Hough.  

John Walker, director of Barclays Private Equity who led both the original management buy out deal and the sale commented: “We were initially attracted to Direct Group by the niche service it provides to customers which remains very much the company’s ethos maintained by the strong management team.  This has been a great success for us, since investing in the management buy out in 2002, profits have doubled.  We are thrilled to have been a part of the growth and success of this company over the past few years. We wish it every success in the future.”