One of the first significant private equity buyouts in Ireland since the outbreak of Covid-19 is on the cusp of closing.

In a deal that values the enterprise at between €80 million and €100 million, mid-market private equity firm Livingbridge is the final stages of acquiring Chill Insurance, the Irish online insurance broker.

The business is majority-owned by Seamus Lynch, who appointed a London-based investment bank called KBW to sell a majority stake in the business some months ago. The company, whose ads feature the comedian and radio host Jennifer Zamparelli, has been growing rapidly through a combination of acquisitions and organic growth.

Its most recent accounts show it had Ebita of €3.2 million on sales of €23 million for its financial year to April 2019. However, this number was before its acquisition of Aaran Insurances, a traditional Dublin broker based in Harold’s Cross, and these numbers do not reflect the current strength of the business.

The Currency understands that Chill’s Ebita for 2020 is set to come in at more than €8 million. Online insurance companies with recurring revenue from a diverse range of customers like Chill can be valued at between 10 and 14 times earnings.

Chill’s customers are sticky and its platform is cost-efficient, factors that make it an attractive proposition for a private equity buyer that can provide it with the capital to scale overseas. It can also help it finance the consolidation of smaller online rivals as well as the acquisition of traditional brokers in need of a technology platform to support their business.

Market specialists

Livingbridge specialises in providing growth capital to businesses. With offices in London, Manchester, Melbourne and Boston, it has the capacity and global footprint to bring Chill into international markets. Livingston’s investment portfolio is diverse, ranging from branded clothing range Fatface to fertility clinics and noodle restaurants.

It is also an experienced investor in scaling online businesses having previously backed companies like Traveljigsaw, an online car hire broker, Silkfred, an online marketplace for boutique fashion brands and Wiggle, an online cycling retailer.

Chill was at one stage funded by Broadhaven Credit Investments, a financial firm backed by billionaire Dermot Desmond and US private equity giant Bain. 

Livingbridge also backed a management buyout of a medium-sized UK insurance broker called Coversure in 2018 so it is familiar with the insurance sector.

It has invested in over 100 businesses doing deals worth up to £200 million. It invests in four sectors

• Healthcare and education;
• Services;
• Consumer; and
• TMT (technology, media and telecoms).

“Livingbridge won’t be addressing any Chill-related requests at this time,” a spokesperson for the private equity company said. Attempts to contact the Lynch brothers were unsuccessful.

Seamus Lynch is the majority shareholder in the business. He is its non-executive chairman having invested heavily in growing the business in part using money he made working for millionaire Denis O’Brien in both Esat Telecom and Digicel. His brother Padraig is the insurance brains behind the business.

“He takes a keen interest in the marketing side. Insurance is too boring for him,” Padraig Lynch said of his brother in a 2018 interview. Chill was founded in 2007 and is a pioneer in online insurance in the Irish market. The chief executive of Chill is Michael McLaughlin.

Seamus Lynch’s brothers Padraig Lynch and Fergal Lynch are both involved at senior levels in the business. Bobby Healy, the founder of Manna Drone Delivery and brains behind CarTrawler, is a director and small shareholder. Terry Buckley, a former director of Independent News & Media and head of Clear Channel Ireland, is also a non-executive director of Chill. 

Motor insurance is the biggest part of its business but it also a significant number of customers who require home insurance, buy-to-let insurance, life insurance and other types of insurance. Unlike other brokers and insurers, it has steered clear of areas like business interruption insurance which has led to a spate of claims and court cases for others. Chill was at one stage funded by Broadhaven Credit Investments, a financial firm backed by billionaire Dermot Desmond and US private equity giant Bain. 

*****

Livingbridge is led by Wol Kolade, who has been with the business for over 20 years. Born in Nigeria, Kolade is a respected investor who recently published a thoughtful note on Livingstone’s website reflecting on his own experience in Britain and the importance of fighting racism. The article was headlined: “The anger and frustration unleashed by the appalling murder of George Floyd in Minneapolis is simple to understand – Black Lives Matter – no exceptions!” After discussing his own experiences of racism, Kolade wrote: 

“I will certainly be asking my colleagues and fellow board members to look again at the steps being put in place to address the shockingly low representation of BAME (Black Asian and Minority Ethnic) leaders in private equity, business and healthcare.”

“To be honest, I am deeply ashamed that it has taken a horrific event in another country to galvanise myself into action,” Kolade concluded. “However, to quote James Baldwin: Not every problem that is faced can be changed but nothing can be changed until it is faced.”