Warranty giant D&G picks bank for €1.5bn float

By Mark Kleinman, City editor
One of Britain's biggest providers of extended warranties on household appliances is lining up banks to prepare a stock market comeback more than a decade after it was taken private.
Sky News has learnt that the owner of Domestic & General (D&G), CVC Capital Partners, has appointed Rothschild to advise it on an initial public offering (IPO) expected to value the company at about €1.5bn.
A formal beauty parade of investment banks to handle the flotation has been scheduled for next week, with an IPO likely next year, according to insiders.D&G insures millions of boilers, washing machines, televisions and cameras in 14 countries, and is chaired by David Tyler, who holds the same role at J Sainsbury, the supermarket chain.Mr Tyler is due to step down from his Sainsbury's role next year as it progresses a merger with Asda, but is said to be likely to remain in place at D&G if it does go public.A sale of D&G is also a possibility, City sources said on Tuesday.D&G was founded in 1912, initially insuring livestock in Western Australia, before its headquarters moved to London.The possibility of an IPO was highlighted in accounts recently filed by Galaxy Finco, the warranty provider's parent company, which reported a 6.5% rise in group revenue to €202m for the quarter to June.D&G employs 2900 people and has a broader network of 8500 approved engineers, which it says is the largest in the UK.
It has core relationships with major consumer-facing companies including Argos and Sky, the owner of Sky News, and has a market-leading position in specialist warranties and home appliance care provision.In total, D&G has 16.4m customers and insures 24m appliances.The company was taken private in 2007 by Advent International, the private equity firm, in a €524m deal, before being sold six years later to CVC for €750m.An IPO of D&G would come at a time of increased regulatory scrutiny of the product insurance market at a time when companies in the rent-to-own sector have faced tough new oversight measures.People close to D&G pointed to Homeserve as the closest listed peer to it, but highlighted its strong relationships with appliance manufacturers and retailers as points of differentiation for it.
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D&G is run by Ian Mason, the former chief executive of Electrocomponents.It declined to comment on Tuesday.
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