Security Pacific Insurance Group

Montagu supported arranged, led and underwrote the institutional equity funding of £2.7 million for the Management Buyout of Security Pacific Insurance Group Limited ("SPIG"), the UK creditor insurance company, in 1994. SPIG, sold by BankAmerica Insurance Group Inc., wrote insurance for individuals protecting the payments they must make under personal loans and mortgages and other forms of personal finance. Within one year of completing, an offer for the business from Norwich Union was accepted and Montagu sold its interest, placing the company in the ownership of a supportive new parent.

Montagu had been introduced to the deal by the advisors to Manny Millor, the Chairman and Chief Executive. BankAmerica Insurance Group Inc. had interest from another insurance company but were prepared to allow Millor the opportunity to prepare a competing bid for the business. Millor had to post a credible offer within a few days and so needed the backing of a private equity investor, who would decide very quickly whether it would support the deal. Our short lines of communication enabled us to do so. With senior term loan facilities for £2.5 million provided by NatWest Acquisition Finance, Montagu was able to complete the acquisition within the targeted period.

Millor had become Chairman and Chief Executive of SPIG in 1992. He immediately set about turning around its fortunes. In 1992 the company was about to post a pre-tax loss for the year of approximately £1.3 million, having suffered heavy losses on the policies it was writing. Millor carried out a thorough review and subsequently a reshaping of the business which ensured that the company was writing the right kind of policies with the right customers.

SPIG became a highly respected company within its niche of the insurance market with a reputation for very efficient administration and excellent information processing and distribution. Manny Millor commented on the buyout: "We were given the opportunity to acquire the business within a short period of time. We chose (Montagu) because we were aware of their experience of the insurance business and because we had confidence that they would be able to deliver the deal within the allotted timeframe. I am delighted to say that our confidence was rewarded".