Phoenix doubles up on HPI in 14 months

Phoenix Equity Partners has sold UK car status information provider HPI to Norwich Union Insurance for £120m, making a profit of £30m.

Norwich Union Insurance has bought UK-based car status information provider HPI from Phoenix Equity Partners for £120 million (€180 million; $220 million).

The transaction represents a swift exit for Phoenix, which acquired HPI in June 2003 in a secondary buyout from pan-European firm 3i. Phoenix paid £31 million for a 70 percent stake in HPI, making a return of just over 2x investment following today’s sale.

HPI was founded in 1938 and provides vehicle checking services for motor dealers, consumers, insurance companies, the police and trade buyers.

The deal was led for Phoenix by chairman David Gregson and investment manager Andrew Deakin who commented in a statement: “We understood the real value of the core business and spotted the opportunity to roll out new products working closely with a very professional management team.”

Gregson put the reason for the swift sale down to the development of a new web publishing system called Exchange: “We had expected that it would take three to five years to exploit Exchange properly, but the company made great strides, became increasingly visible in the marketplace and we had a couple of approaches.”

3i had originally backed HPI in December 2000, investing £27 million in the business. 3i saw a 1.8x return on that investment when it sold its stake to Phoenix in 2003.

Phoenix’s investment was made from its £300 million Phoenix Equity Partners IV Fund, which is understood to be around 50 percent invested following investments this year in Palletways, a UK freight logistics distributor, in June and the February backing of Jaycare, a UK healthcare packaging supplier.

Phoenix is a privately owned equity firm that manages four funds with committed capital in excess of £500 million. The group bought itself out of Credit Suisse First Boston in 2001 and focuses on five distinct sectors: financial services; leisure & retail; media; consumer & healthcare and transport & business services.