Sydney’s Next Capital has ruled off a chunky dividend recapitalisation at Compare Club, three years after taking the keys to the business.
Street Talk can reveal the mid-market private equity firm has signed a $150 million debt deal for the comparator website, including a new $50 million facility and a $100 million securitisation of its book of trailing commissions on insurance sold through the website.
As part of the refinancing, MA Financial’s lending business – spearheaded by executive director Guy Kaufman – will join the debt stack at Compare Club, which offers a website comparing insurance policies, energy bills and home loans.
Adam Dicembre, who joined Next’s partnership ranks last year, and investment director Bradley Sam oversaw the deal, which allowed the firm to take a chunk of equity off the table, netting an early payday, while retaining the bulk of Compare Club’s ownership.
Sources said the structure is a first for the local asset-backed securitisation market. It is backed by a 12-year net present value of Compare Club’s future life insurance trail commissions, a testament to the significant equity value embedded in the trail book. It also tackles the industry-wide problem of cashflows from life insurance commissions lagging business needs, and is expected to arm Compare Club with growth capital.
Next Capital was advised by boutique firm Centennial Partners. Ashurst and NOD&Co acted as borrower counsel, while King & Wood Mallesons advised MA Financial.
Next paid $100 million-plus to buy Compare Club in October 2022, when the business was making about $20 million EBITDA a year.
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