HPS Investment Partners and Madison Dearborn Partners (MDP) plan to merge most of their UK general insurance businesses including the Towergate Group into a single entity.
The diversified insurance group formed by the US private equity firms will also feature two recently announced acquisitions. It has been temporarily named as KIRS which will later be renamed in the third quarter.
The merger of the companies is expected to bring in considerable benefits for customers, the group's market position and cost efficiency, according to the US private equity firms, HPS and MDP.
KIRS will bring van insurance broker Autonet, private medical insurance (PMI) brokerage services provider Chase Templeton, insurance solutions provider Ryan Direct Group and insurance broker Towergate Group under one umbrella. All the four insurance firms will continue to operate independently under their existing leaderships.
HPS and MDP have appointed John Tiner as chairman and Towergate Group CEO David Ross as CEO of KIRS.
Ross said: "The coming together of these companies under a single holding company is a major milestone for the HPS and MDP insurance platform.
“The Group will be a diversified business of scale with an unparalleled footprint and distribution presence comprising companies that are independent market leaders in their respective lines of business."
Also joining KIRS will be specialist international wholesale insurance broker Price Forbes which will also operate independently under its existing management.
Price Forbes CEO Mike Donegan who has been appointed as the executive director of KIRS said: “This structure provides the Price Forbes board, my experienced international and UK teams and importantly our worldwide client base, all the benefits of global independence on one hand and deep access to capital from very strong shareholders on the other.
“Our strategic intentions remain unchanged and can only be strengthened by this announcement."
KIRS has also agreed to acquire Nevada, the holding company for the Autonet and Price Forbes businesses for £250m. Nevada has separately agreed to acquire Ryan Direct Group and Chase Templeton.
Image: Towergate Insurance headquarters in Maidstone, England. Photo: courtesy of Richard Dorrell/Commons.wikimedia.org.