Admiral Group has announced that it has reached an agreement with ZPG Comparison Services Holdings UK Limited, who will purchase Penguin Portals Group (Confused.com, Rastreator.com and LeLynx.fr) and its 50% share of Preminen Price Comparison Holdings Limited. Together with the “Proposed Transaction”. MAPFRE will also sell its 25% holding in Rastreator and 50% holding in Preminen as part of the transaction.
The total transaction value, including the amount attributable to MAPFRE, is £508 million plus a further amount that will accrue until the date of completion of the Proposed Transaction (“Transaction Value”). The Transaction Value shall be satisfied in cash at completion of the Proposed Transaction subject to certain adjustments. The proceeds to Admiral, net of minority interests and transaction costs, will be around £450 million. As noted above, the final transaction value will depend on the completion date.
In light of the strong solvency and liquidity position of the Group, Admiral expects to return a majority of the net proceeds to shareholders, though will retain a portion to support investment in new business development over the coming years. Further details will be provided after completion. Completion of the transaction is subject to customary regulatory and competition authority approvals and is expected to close in the first half of 2021.
David Stevens, Group CEO of Admiral Group commented:
“The purchase of the UK and European comparison businesses by RVU offers a positive outcome for our customers and our employees, and also provides good value for our shareholders.
The combination of Penguin’s strengths, notably in insurance comparison across much of Europe, with RVU’s strengths beyond insurance and experience in growth through acquisition, provides a solid foundation for the combined businesses to grow and prosper.
Admiral will continue to focus on what Admiral has consistently done well, namely designing and underwriting good value mass market financial service products. Comparison will continue to be Admiral’s most important distribution channel in Europe and we look forward to continuing to work closely with Confused.com, Rastreator and LeLynx as they continue to grow and strengthen the customer offering.
It is a wrench to part company with our fellow employees at Confused.com, Rastreator, LeLynx, Admiral Technologies and Preminen, but I believe it is the right choice for the long-term success of the businesses and will create many interesting and worthwhile opportunities for our teams going forward. I thank them and their predecessors for their contribution to the success of the Group and to the financial well-being of their millions of customers.”
Elena Betes, CEO of Penguin Portals commented:
“We are very excited for the next stage of our journey. Our purpose, strategy, expertise and culture align strongly with that of RVU. Becoming part of a global network of brands and platforms, united by the same mission to help people make better decisions, will bring significant benefits to our customers and our people.
We are also very thankful for all of the support and guidance we have received from Admiral Group throughout the years. I would particularly like to thank David, Milena and Henry for their foresight and trust.
The extraordinary efforts of every member of the Penguin team has meant that in 2020 all of the Penguin Portals have proved to be highly resilient customer-centric businesses. Thank you Penguins! I know we will go from strength to strength with RVU as we are given great support, will benefit from highly relevant learnings and have huge ambition for the future.”
Tariq Syed, CEO of RVU commented:
“Penguin Portals offers an exciting opportunity for us to expand our consumer brand portfolio and geographic reach. With its focus on insurance, Confused.com perfectly complements Uswitch’s existing expertise in the home services category, and, with equally established offerings in other countries, we have an opportunity to help even more consumers find the right deals for their needs.”
Admiral was advised by Houlihan Lokey, Clifford Chance LLP and KPMG in connection with the transaction.
Is the party over for comparison sites in 2021? Could well be if consumers are going to be automatically awarded premium reductions, or at least a price freeze, as a reward for loyalty. What is the point of spending three hours online filling in various forms or calling comparison sites if you can get cheaper car insurance simply by staying put?
Of course that may not be the result of the FCA’s intervention in the car and home market, but you can’t blame Admiral for moving out of the comparison marketplace, as margins are thin and if next year sees a boom in commuting by car as people avoid Covid-infested public transport, the number of claims could soar. Pricing is going to be a big challenge in the car market for the next couple of years.