Skipton Building Society has sold its majority stake in credit reference and marketing services subsidiary Callcredit Information Group for an undisclosed sum.
The sale, which followed a review of Skipton’s group businesses, will generate £40 million of extra profit for the UK’s fourth largest building society.
Vitruvian Partners, a London-based private equity firm, has bought Skipton’s share with the support of CIG’s management team.
The move follows a successful partnership spanning nearly a decade which has seen Skipton working with CIG management to establish the business and develop it into one of the UK’s leading suppliers of credit and marketing information.
Leeds-based CIG will now operate as an independent business and look to increase in its customer base in a wider geographical area.
Vitruvian Partners will inject investment, along with new ideas and experience into the business’s development.
David Cutter, Skipton Group chief executive, said: “CIG has been a major success story for Skipton of which we are very proud.
“Our support and guidance has enabled the business to penetrate the credit referencing and marketing information markets and, in doing so, to become a serious rival to the major players, from which it continues to take market share.
“Following a strategic review, Skipton decided CIG was no longer core to our future business direction. At the same time, CIG has huge potential and is now ready to enter the next stage of its development as an independent business with ambitious aspirations.
“Therefore we concluded that this is the appropriate time for CIG to move on and for its next growth phase to be supported by private equity, rather than ourselves as a member-owned building society. We’re delighted to have achieved such a positive outcome for CIG’s staff, and for Skipton, and this substantial boost to our profitability and financial strength will provide a real shot in the arm for our own future business ambitions.”
CIG was established in 2000 and now has 600 employees and annual turnover of around £50 million. Last year it recorded profits of £5 million.
John McAndrew, CIG chief executive, said: “We are extremely grateful for the help and support of Skipton over the past nine years.
“We have a reputation for differentiating ourselves through innovation and delivering outstanding value and service. To do this, we have been investing in people, technology and new products.
“We now have plans to explore new markets and are very optimistic that this change of ownership will provide us with the impetus to achieve our goals.”
“We’re delighted that Vitruvian Partners emerged as the buyer because they are committed to supporting our existing business strategy as well as our vision of growth through both organic development and acquisition.”
David Nahama, a founding partner at Vitruvian, said: “CIG sits right in our sweet spot as an entrepreneurial organisation, deploying smart technology and with a strong, customer-centric management team and great strategic opportunities ahead of it.”
Skipton says it expects to announce increased operating profits in the spring following half-year profits of £17 million.
Last month, Skipton accessed £650 million of additional funding under the Government’s Credit Guarantee Scheme.
Its issue of packaged debt was three times over-subscribed. The Society raises about 80 per cent of funding from retail deposits.
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