iSelect receives conditional proposal

iSelect 2Quest is a substantial holder in iSelect which today announced that the Board had received a confidential, indicative, non-binding and conditional proposal from an international private equity firm. Unusually, no price has been disclosed as yet. Quest owns 6.5% of iSelect across our mandates.

The bidder is private equity firm Providence Equity Partners based in Providence, New York State. Providence have offices in London, Delhi, Hong Kong and Singapore and specialise in media, communications, education and information investments. The company website suggests a history of 140 investments since founded in 1989.

iSelect is an on-line comparison site that compares pricing in private health, car insurance, broadband, home loans and energy. The stock was capitalised prior to this approach at $400m. The company have $113 m in cash in July 2015 representing 28% of the capitalisation. The cash build has led the Directors to confirm a buy back will take place if this proposal does not proceed. The 2015 fiscal result saw revenue up 15% to $157m and net profit up 17% to $27.5m. There is plenty to play out here with the stock initially trading up 8% at $1.65. Meanwhile, the market awaits further developments on this proposal. The Quest valuation of iSelect remains well above current trading levels.