Kwik-Fit to Sell Insurance Business for £200 million
Ian Fraser, CEO of tyre retail giant Kwik-Fit is preparing to sell its insurance wing for in excess of £200 million. According to a report published in the Sunday Times on 14 February, Kwik-Fit has hired bankers at Credit Suisse to carry out a review of Kwik-Fit Financial Services. The report points out that a sale of the operation would help Kwik-Fit cut its debts of around £822 million.
The financial services part of the business, which employs over 1000 workers and handles 10 million calls a year, was launched in 1995 and includes Kwik-Fit Insurance, the Green Insurance Company and Express Insurance. According to the company, it has more than 1 million policies in motor, home, pet and travel insurance.
Kwik-Fit, which is estimated to supply 5 million tyres a year in the UK (roughly a sixth of the total market), said “the review follows unsolicited bid interest.” But with current owners PAI having to inject £20 million into the company in December to prevent it breaching banking covenants, a sale would also help the company’s cash flow.