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Goldman Sachs buys 50 percent stake in UK motor insurer-Reuters

(Reuters) – A Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) unit has bought a 50 percent stake in privately-held British motor insurer Hastings, in a deal that values the company at 700 million pounds ($1.13 billion).

Goldman’s merchant banking division (GS MBD) will finance the stake purchase through a mix of equity and new debt financing, the companies said on Tuesday. The team that led the management buyout of Hastings in 2009 from Insurance Australia Group (IAG.AX: Quote, Profile, Research, Stock Buzz) will retain the other 50 percent.

Hastings reported earnings before interest, tax, depreciation and amortization of 83.3 million pounds for the year to the end of June. Hastings had 1.3 million customers at the time, it said.

The deal comes after the recent flotations of insurers Direct Line (DLGD.L: Quote, Profile, Research, Stock Buzz) and Sheilas’ Wheels owner esure (ESUR.L: Quote, Profile, Research, Stock Buzz), who are currently valued at 3.09 billion pounds and 943.6 million pounds respectively.

Evercore Partners (EVR.N: Quote, Profile, Research, Stock Buzz) and Peel Hunt advised Hastings on the deal while Goldman Sachs International acted as financial adviser to GS MBD.