ONLINE comparison site GoCompare is to demerge from esure and and be floated on the London Stock Exchange with the aim of boosting growth and performance.
The demerger between GoCompare and esure, expected to cost £19m, is subject to the approval of esure shareholders and regulatory approvals and following a strategic review of the group.
Peter Wood, chairman of GoCompare.com said, “esure and Gocompare.com are distinct businesses, which are both underpinned by strong brands. A demerger will allow the separate management teams to focus on their independent strategies, and also enhance their ability to align senior management incentives,”
To fund the demerger, Gocompare.com will draw down on a new £75m debt facility and pay esure a cash dividend in the region of £63m. In August, esure reported interim results of gross written premiums of £320.4m, up 16.3% on the previous year. Underlying pre-tax profit fell 1.9% to £45.6m caused by adverse weather in the first half of 2016. At the time the group reported revenue growth for Gocompare.com of 22%.
The board said it hoped the demerger would also improve GoCompare.com’s ability to attract and retain senior technology managers, who would join a stand-alone entrepreneurial digital technology business.
The directors of Gocompare.com will include chairman Sir Peter Wood, who is also esure group chairman, CEO Matthew Crummack and CFO Nick Wrighton, who was deputy CFO of esure, as well as other non-executive directors.
Further details on the demerger will be sent to shareholder on or around 11 October 2016, the company said in a statement.