National General Acquires Direct General

TigerRisk Capital Markets & Advisory acted as financial advisor to Direct General

Transaction Overview

On June 24, National General announced an agreement to acquire Direct General Corporation

  • Purchase price of $165mm representing 1.27x 12/31/15 GAAP equity
  • Transaction closed on November 1, 2016
  • Direct General has been owned by Calera Capital and TPG Capital since March 2007

National General CEO, Barry Karfunkel made the following points regarding the acquisition:

  • Adds a company that is well known as a direct marketing NSA leader in the Southeast
  • Track record of strong growth enabling expansion of National General’s distribution channel
  • Expect to realize benefits from transitioning Direct General to National General platforms
  • Immediately accretive to earnings

Direct General is the largest privately-owned direct-to-consumer auto insurer in the U.S.

  • Produced over $500mm of direct premium in 2015 across 13 core Southeastern states
  • Employs a direct to consumer omni-channel distribution strategy including 417 store fronts

National General is a specialty personal lines insurance holding company

  • Provides personal and commercial automobile, homeowners, recreational vehicle and A&H
  • Built through a combination of organic growth and opportunistic acquisitions
  • National General has managed premium over $2.6bn and has $1.6bn of shareholders’ equity

Calera Capital is a private equity firm solely focused on investment in the middle-market

  • Since inception, Calera has invested over $2.7bn of equity in over 30 investments

TPG is a leading global private investment firm founded in 1992 with over $70bn AUM

  • TPG Capital has invested nearly $50bn of equity capital through more than 150 transactions

TigerRisk Capital Markets & Advisory Role

TCMA acted as financial advisor to Direct General and its owners, TPG and Calera

  • Assisted in running broadly marketed sale process
  • Provided transaction advice to assist sellers in receiving a premium valuation
  • Assisted in transaction negotiations