Fourth exit of the year for LDC as Direct Group is sold

LDC has exited its investment in Direct Group, five years after acquiring a minority stake in the business.

LDC has exited its investment in Direct Group, five years after acquiring a minority stake in the business.

Outsourced insurance service provider Direct Group has been sold to Ryan Specialty Group (RSG) for an undisclosed amount.

Based at sites in Doncaster and Halifax, Direct Group provides services to insurers and corporate partners, including policy administration and fulfillment, commission management, premium collection, claims handling and performance reporting.

In August 2007 LDC backed the management buy-out of Direct Group and invested £21.3 million for a minority shareholding. The transaction represents LDC’s fourth exit of the year following the sales of lingerie business Eveden in March, pet food and animal products company Cranswick Pet Products in April and software firm BigHand in May.

Under LDC’s tenure, Direct Group made four ‘strategic’ acquisitions including that of insurance broker Millennium in 2008 and its latest purchase of Simple Insurance in June.

Its sale to fellow insurance firm RSG is said by the acquirer to ‘significantly’ strengthen its managing general agent and third party administration capabilities in the UK.

Following the deal, Direct Group’s directors will remain with the business and play an ‘active role’ in its future development.

Derek Coles, CEO of Direct Group, says that LDC has been a ‘key backer’ of its growth strategy.

He adds, ‘With additional debt funding from the Lloyds Bank Wholesale Banking & Markets team, we’ve been able to capitalise on acquisition opportunities to develop and broaden our proposition, giving us a significant advantage in the market.’

Carl Wormald, director at LDC, comments, ‘Through a combination of highly targeted acquisitions and strong organic growth, the management team of Direct Group has built a business of significant scale and expertise in its market.

‘It is an excellent strategic fir for Ryan Speciality Group, which provides significant forward opportunities for its continued expansion and development.’

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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