Simply Business, an online insurance platform for SMEs, is being acquired by US bigwig The Travelers Companies for a sum of $490 million.
The transaction will be funded by Travelers, subject to market conditions, through a combination of debt financing and internal resources. According to a statement, it is expected to close in the third quarter of 2017, subject to regulatory approvals and other customary closing conditions, and is projected to have “an insignificant impact on Travelers’ 2017 and 2018 earnings per share.”
UK-based Simply Business was founded in 2005 and was first acquired by private equity firm Aquiline Capital Partners in a £120 million deal last year. The firm’s claim is that it serves more than 425,000 microbusiness customers, with offices in London, Northampton and Boston. Through its managing general agency, Simply Business participates as a panel member and underwrites a significant amount of the total premium it places through its platform each year.
Jason Stockwood, chief executive officer of Simply Business, said in a statement:
This is a tremendous opportunity for our company and employees, as well as a strong validation of our business model. I am excited about Simply Business benefiting from Travelers’ extensive knowledge of the US market as we develop our approach there, as well as the resources it has to support potential expansion into additional markets. Our shared values and commitment to innovation make this transaction a perfect fit.
Alan Schnitzer, chief executive officer of Travelers, also had something to say:
Simply Business is a profitable and growing technology company with impressive strategic digital capabilities, leading digital commerce talent and proven small business insurance expertise.
He talked about the ability of Simply Business to make the small commercial insurance transaction “easier, faster and more efficient”, going on to say:
With technology and innovation driving customer preferences and expectations, advancing our digital agenda to best serve our customers and the marketplace is a key strategic priority.
Skadden, Arps, Slate, Meagher & Flom LLP provided legal counsel to Travelers in this transaction.
