ABRY shops insurance business Confie for second time

  • Genstar sold Confie to ABRY in 2012
  • ABRY tried to sell Confie in 2015, sought up to $1.6 bln
  • Confie produces $125 mln EBITDA, seeks bids 10x-12x

Nearly three years since its last attempt at a sale, Confie is back on the auction block, four sources said.

ABRY Partners, which owns Confie, is seeking bids in the double-digit range, like 10x-12x, for the insurance broker focused mainly on Hispanic consumers, two of the sources said.

Evercore is advising, people said.

The auction is attracting value-oriented private equity investors that have a track record of operational improvement in businesses they buy, one of the people said.

Confie produces $125 million in Ebitda, the source said. At 12x, Confie would sell for $1.5 billion.

Founded in 2008, Confie is the Huntington Beach, California, provider of personal and small commercial lines insurance.

The company’s main product is non-standard auto insurance, offered to drivers who have difficulty buying standard or preferred auto insurance due to driving records, claims history or limited financial resources, Moody’s Investors Service said in a July 11 credit opinion.

The company generated about $475 million revenue in 2018, Moody’s said.

“Confie is exploring strategic alternatives for its capital structure, including a possible refinancing,” Moody’s said.

Confie has pursued a rollup strategy to grow and has made more than 100 acquisitions. Most recently, Confie bought Day & Read Inc and Blue Ridge Insurance in February. It also closed five acquisitions in June 2017. The company has more than 3,800 people spread through nearly 800 offices in 19 states.

ABRY has owned Confie for nearly six years, buying it from Genstar Capital in 2012. That deal produced a 5x return for the San Francisco buyout shop, Buyouts reported.

ABRY attempted to sell Confie in 2015, Reuters said. The Boston private equity firm was seeking as much as $1.6 billion for Confie that year. That effort did not result in a sale.

The current auction is having issues, sources said. Confie is heavily leveraged with about $1.09 billion in debt, Moody’s said.

The company has also switched CEOs several times. In August 2017, Confie named Cesar Soriano chief executive. Soriano succeeded Mordy Rothberg, the company’s founder, who continued as executive chairman. Rothberg himself succeeded Valeria Rico, who served as CEO from November 2014 to November 2016, her LinkedIn said. Rico appears to have followed Joe Waked who was named Confie CEO in January 2012.

Confie’s rollup strategy has some bidders wondering whether there are still enough logical acquisitions with scale for the company to move forward, people said. Some of the managing general agents that Confie has acquired have performed poorly, sources said.

ABRY is also seeking a high price. While the firm is looking for bids of 10x to 12x, potential buyer interest is in the 8x-to-9x range, one of the sources said. “Most sponsors have been waiting around for ABRY’s price expectations to get more realistic,” the source said.

ABRY, Confie and Evercore could not be reached for comment.

Action Item: Contact CEO Cesar Soriano at +1 714-252-2500