RSA, FORMERLY Royal and Sun Alliance, has become the second largest general insurance company in the State, after announcing a €65 million-plus acquisition of 123.ie.
The sale, which is subject to regulatory approval, has netted a multi-million euro windfall for the main shareholders of 123.ie, Derek Richardson and managing director Andrew Collins.
Based on their shareholding in the company, Derek Richardson could net €37 million under the terms of the deal, Andrew Collins could receive more than €24 million while the third shareholder, Geoff Boyle, may be in line for just over €3 million before tax.
In addition, the deal will involve a further deferred payment linked to performance targets, although neither party would comment on the possible value of the earn-out figure. 123.ie’s premium income to the end of March 2010 was approximately €60 million. It has gross assets of around €20 million.
123.ie was established in 2002. In 2007 Andrew Collins, previously managing director of needahotel.com, joined the business.
Dublin-based corporate finance company Raglan Capital advised Mr Collins on the deal.
123.ie offers mainly motor, home, pet and travel insurance products through its web and call centre operations.
123.ie will continue to operate under its own brand and structure following the acquisition. The company’s existing management team will continue to run the company, while its 150 employees and 170,00 customers will not be affected by the deal.
The acquisition is RSA’s fourth in four years. In 2006 it acquired EGI Holdings, followed by Sertus in 2007 and the purchase of Benchmark last year.
The 123.ie deal is RSA’s largest acquisition to date. In addition, 123.ie’s status as a major provider of personal insurance products, will solidify RSA’s position in this area.
While RSA is a major provider of commercial products, it is less well known as a retail brand. Most of its business is done through brokers and partners rather than through direct distribution.
RSA’s Pat Nally said yesterday that the acquisition was in line with the company’s strategy to maintain its position as a major presence in the Irish market.
He said the company is still in the market for further acquisitions, but declined to comment on any potential interest in Quinn Insurance. RSA rebranded in 2008.
