Cinven's latest exit — the listing of insurer Partnership Assurance Group — represents a 7x multiple.
The firm acquired the company in 2008 for £158 million. It now stands to receive more than £300 million from the transaction, and will retain a 52 percent in the group after completion of the IPO.
“Having identified UK annuities as a long term growth market, we recognised that Partnership’s unique intellectual property would allow the business to capitalise on the growth opportunity at hand,” said Maxim Crewe, a principal at Cinven, in a statement.
Partnership listed Friday on the London Stock Exchange at a price of 385p per share, valuing the business at £1.54 billion (€1.81 billion , $2.40 billion). With an order book comprising 75 percent of UK and US funds, it was around 10 times oversubscribed, according to sources close to the matter.
Partnership provides tailored annuities to customers with medical conditions, as well as insurance to fund long-term residential care. Under Cinven’s ownership, the group largely focused on expanding its product range and distribution network, as well as strengthening its intellectual property and underwriting systems. It posted an operating profit of £112 million last year, up 42 percent on 2011.
The listing will allow Partnership to raise £485 million, and is expected to make the company eligible for inclusion in the FTSE 250 at the index’s next review date in September. The group stated earlier this year that the proceeds will be used to repay debt and finance general corporate needs.
It is the third IPO backed by Cinven in recent years, after its successful exits from Ziggo, a Dutch cable provider, and Amadeus, a software provider to the travel industry.
The firm floated Amadeus on the Spanish stock exchange in April 2010, and posted a total 7x return on its investment when it offloaded the last of its stake in November 2011. It then listed Ziggo on NYSE in March 2012, allowing it to generate a total 2.8x return in four successful share sales, the last of which took place in April 2013.