Milestone Partners has formed Drive Assurance as a specialty automotive insurance holding company and has completed its first transaction with the buy of GoAuto, a provider of personal automotive insurance, and its affiliated technology platform, Adaptive Information Technologies (AIT).
GoAuto’s automotive insurance products include low-limit policies that are sold to consumers through 70 stores located in Louisiana, Ohio, Nevada, and Eastern Texas. The specialty insurance market is growing, highly fragmented and in 2021 represented just over 22% of the $260 billion in paid premiums in the personal auto insurance sector.
GoAuto utilizes AIT’s data analytics and underwriting technology that, according to the company, allows it to experience lower loss ratios and higher margins than its competitors. GoAuto was founded in 2009 by CEO Greg Tramontin and is headquartered in Baton Rouge, Louisiana.
“We are excited to partner with Milestone during this next stage of growth,” said Mr. Tramontin. “Given their targeted sector focus on financial technology companies and robust experience in automotive financial services, we are confident that together we will continue to provide best-in-class vehicle protection products and customer service to our valued policyholders.”
Milestone invests from $5 million to $40 million in leveraged buyouts and recapitalizations of lower middle-market businesses that have revenues of $15 million to $150 million, EBITDA of $3 million to $20 million, and valuations of $15 million to $150 million. The firm prefers niche-market leaders that provide high-margin products or services. Milestone was founded in 1995 and is headquartered near Philadelphia in Radnor, Pennsylvania.
“GoAuto’s proprietary software enables superior customer analytics and data-driven operations that have established them as a market leader,” said Adam Curtin, a partner at Milestone. “We look forward to working with the management team on executing their strategic initiatives.”
Summit Partners, Everberg Capital, LBC Credit Partners, Principal Alternative Credit and FS Investments provided a senior credit facility to support the buy of GoAuto.
Piper Sandler & Co. was the financial advisor to GoAuto.
© 2022 Private Equity Professional | June 21, 2022
