Premium Credit

Activity
Specialty Finance
Transaction value
£462 million
Acquired
February 2015
Sector
Financial Services

Business
Premium Credit is a UK-based insurance premium finance company that enables individuals and businesses to spread the cost of upfront annual insurance premiums and other services by paying in monthly instalments.

The Company's products are a key source of funding for consumers and smaller businesses in the purchase of often mandatory products, such as motor, home or fire insurance. Premium Credit also provides financing for the payment of annual fees such as professional fees, membership subscriptions, commercial service charges and school fees. 

In 2015, the Company achieved gross advances of £3.9 billion, processing more than 29 million Direct Debits. It has over 2 million customers and works with approximately 2,700 intermediaries.

Premium Credit was established in 1988 and is headquartered in Surrey, UK, and employs more than 400 people.

Cinven agreed to acquire the business in January 2015 for an enterprise value of £462m.

Rationale and strategy
Cinven's Financial Services team identified Premium Credit as a well-run business with an attractive and diversified customer base, a broad distribution network and a good reputation for customer service.

In addition, the company has an experienced management team, excellent operational and risk management capabilities and has generated strong performance throughout economic cycles. The management team is led by Tom Woolgrove, Chief Executive, who joined the business in January 2016. 

Cinven intends to partner with Premium Credit and its management team in order to build a diversified UK specialty finance business through organic growth, new product launches and selective acquisitions.