Short term car insurance firm Tempcover completes £13.3m management buy-out

Set to expand due to the rise of the gig economy, the deal included a £7.5m investment from Connection Capital and a £5.75m debt package from Santander

Tempcover, the UK’s leading provider of short-term motor insurance products, has changed hands following a management buy-out (MBO) worth £13.3m – backed by a £7.5m investment from Connection Capital and a £5.75m debt package from Santander.

During the various stages of the MBO, Tempcover shareholders were advised by Cavendish Corporate Finance.

Founded by current CEO Alan Inskip back in 2006, Tempcover provides drivers with temporary motor insurance from selected insurers via its online platform.

More recently, the Fleet-based business has successfully launched additional temporary cover products in a bid to meet growing consumer demand – helped no end by the rise of the gig economy.

With an estimated 60% market share in its niche sector, its been suggested that Tempcover wrote over 360,000 policies during 2017 alone – with the fresh funds acting as fuel to help expand into new and emerging markets.

As part of the deal, Connection Capital has also added Peter Barrett as non executive chairman and Christian Young as a non executive director to Tempcover’s board.

Alan Inskip, CEO of Tempcover, said:

“This new partnership is a very exciting opportunity for Tempcover to both consolidate its existing position and provide a platform for further growth into new verticals and markets.

“Many thanks to the Cavendish team who provided invaluable advice throughout the process and helped us achieve this great outcome for the Company”.

Nick Jones, partner and head of technology at Cavendish Corporate Finance, who advised the shareholders of Tempcover on the transaction, said:

“Temporary insurance continues to grow rapidly reflecting the evolution of flexible sharing models and more bespoke customer requirements.

“Tempcover is well-placed to capitalise on this growth with a highly scalable model which allows it to dominate in its current offering and enter new temporary cover verticals with ease.

“Connection’s investment will be invaluable as Tempcover strengthens its market position and expands and we are delighted to have assisted Tempcover on achieving such a successful outcome.

“Following on from Avantia and Halo this is our third sale of a business in the online insurance sector, a high value and growing segment.”