Partnership Assurance Group Plc, a U.K. annuity provider, may be valued at “significantly” more than 1 billion pounds ($1.5 billion) when it goes public next month, Chief Executive Steve Groves said.
The insurer, which offers annuities to people with medical conditions, will to raise 120 million pounds in the initial public offering to pay down debt, the firm said in a statement today. Cinven, the private-equity firm that acquired Partnership for about 200 million euros ($259 million) in 2008, will also sell a stake, leaving a free-float of at least 25 percent.
“I would see us positioned within the growth stocks in the insurance space,” Groves said in a telephone interview today. That would suggest a valuation of “significantly above” 1 billion pounds, he said.
The insurer is going public after motor insurer Esure Group Plc raised 604 million pounds in an IPO in March and Royal Bank of Scotland Group Plc raised about 1.3 billion pounds by selling stakes in Direct Line Group Plc, Britain’s biggest home and motor insurer. Companies in Europe, the Middle East and Africa have raised $6.7 billion in IPOs this year, 70 percent up on the year-earlier period, according to data compiled by Bloomberg.
Partnership controls about 26 percent of the U.K.’s so-called enhanced annuity market, which sells guaranteed lifetime incomes to pensioners with pre-existing medical conditions and has grown by about 33 percent annually since 2006, Groves said.
The firm has an advantage over competitors because it has the oldest proprietary data in market, stretching back to 1995, after purchasing the information from Pension Annuity Friendly Society in 2005, Groves said.
“With high-quality data you’re able to price more accurately,” he said. “We use that data to give our customers, who are people with a medical condition, better incomes than they could get elsewhere.”
Operating profit rose 42 percent to 112 million pounds in 2012, the insurer said.