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UK insurance group Esure has announced the demerger of GoCompare, its price comparison site, less than two years after it took full control of the business.
The company said on Tuesday that it would list GoCompare separately on the London market so that both parts of the group could focus on their own operations, writes Oliver Ralph.
“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,” said Esure chairman Sir Peter Wood.
Analysts think that, as a standalone entity, GoCompare could be worth between £400m and £650m.
Esure said that it would give more details on the structure of the demerger next month, and that the move should be complete by the end of the year. It added that the deal would cost £19m to complete. Before the demerger, GoCompare will draw down on a debt facility so that it can pay Esure a £63m dividend.
Esure announced in June that it was reviewing its options for GoCompare. At the time, analysts said they were surprised by the move. Last year the group paid £95m to buy the half of GoCompare that it did not already own.
Since then it has re-vamped the unit, with a new chief executive, a new advertising campaign and a wider product range. Revenues at GoCompare were a fifth higher in the first half of this year than they were in the same period in 2015, while profits jumped 9 per cent.
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