Hastings Direct is set to join the ranks of insurers listed on the London Stock Exchange (LSE), which is expected to value the firm at up to 1.5bn. In a statement that was issued Tuesday it announced its intention to float on the FTSE index of the LSE next month. It plans to raise £180 million through a listing on the LSE, using the proceeds to reduce debt and strengthen its capital base.
Hastings Direct was founded in 1997 with just 50 employees, with a large base in Bexhill and other offices in Newmarket and Leicester it is now one of Britain’s fastest growing motor insurance businesses.
The firm is led by chief executive Gary Hoffman, who ran Northern Rock after the bank was rescued by the Government. He stands to benefit in the float plans, from the boost to the value of equity he holds and potential performance-linked share awards.
US investment bank Goldman Sacs will also enjoy a huge return less than two years after ploughing in £150 million to what was then a loss making business employing around 750 people. It will also sell at least a quarter of its holding shares.
This is also good news for Hastings Direct employees, who also stand to benefit through schemes that will see them receive shares worth hundreds of pounds each.
The company is aiming to expand its number of customer accounts from 1.9 million to 2.5 million by the end of 2017.
Hastings Direct will join the likes of Admiral, Direct Line and Esure on the stock market at a time when the broader insurance is witnessing a deluge of takeover activity. The group has seen rapid growth over the last three years with the number of live customer policies growing at a compound rate of 22.5% across that period.