Auto Insurance Company GoAuto Acquired by Pennsylvania Private Equity Firm | Business

0

GoAuto — the Baton Rouge-based low-cost auto insurance company best known for its TV commercials featuring its CEO and founder, Greg “the GoAuto Guy” Tramontin — has been acquired by a Pennsylvania private equity firm .

Milestone Partners purchased GoAuto and its technology platform, Adaptive Information Technologies, through an auto insurance holding company called Drive Assurance Holdings. The terms of the contract are not disclosed.

Tramontin said the acquisition should not affect policyholders or company personnel. He said he plans to stay on as CEO and his management team will stay on as well.

Tramontin said building an auto insurance company from the ground up — his second such effort — left him feeling a bit exhausted.

“It’s something we had come a long way,” he said. “It was kind of an exit strategy for me. We started it in 2009, and you’re a little tired. We decided to test the market. There was quite a bit of interest.”

GoAuto, founded in 2009, has 70 storefronts and operates in Louisiana, Texas, Nevada and Ohio. Its 3.99% market share for automobile liability insurance premiums was the seventh highest in Louisiana in 2020, according to the latest available data from the state Department of Insurance. This equated to nearly $122.5 million in bonus payments.

For physical damage auto policies, GoAuto was eighth in Louisiana in 2020 with a market share of 2.65%, or $44.5 million in premiums. Automobile liability policies cover damage caused by an insured driver, while bodily injury policies cover damage to the insured driver’s vehicle.

Tramontin said the company had been looking for a buyer for at least two years. GoAuto hired investment bank Piper Sandler to look for one. The hunt yielded Milestone Partners, whom Tramontin called “down to earth, very nice people and very, very smart.”

What followed was an “exhausting” 15 months of due diligence work. It would have been completed sooner had it not been for inflation and the COVID-19 pandemic. “It dragged on for a while,” Tramontin said. “But in the end, we made it.”

Twice a day we’ll send you the day’s headlines. Register today.

Tramontin said the acquisition could lead to expansion for GoAuto. Milestone Partners plans to acquire two or three similar car insurance companies and combine them under the GoAuto umbrella.

“There is no downside for policyholders. There might actually be an advantage,” he said.

Milestone markets itself as a private equity firm that targets niche companies in the insurance, specialty finance, payments and capital markets industries. Its portfolio includes companies that offer “technology solutions” and “technology-driven manufacturing,” according to the company’s website.

The advantage that GoAuto offers, according to Tramontin and Milestone, is its software platform.

Tramontin and James Holland, his partner at Adaptive Information Technologies, developed a user-friendly online platform for insurance customers when Tramontin launched USAgencies, its first low-cost auto insurance company, in 2004. He sold the company in 2007, and he and Holland spent the next two years — under a non-compete clause — further tweaking the platform.

The platform makes it easy to change policies, Tramontin said. Customers can update their coverage and add or subtract vehicles on their phone, on a computer or at a GoAuto store.

In a statement, Milestone Partners praised the software and its ability to use data when writing policies for clients.

“GoAuto’s proprietary software enables superior customer analytics and data-driven operations that have established them as a market leader,” Milestone Partner Adam Curtin said in a statement. “We look forward to working with the management team on the execution of their strategic initiatives.”

In addition to its low-cost policies, GoAuto stood out in the Baton Rouge market for its television and radio commercials featuring Tramontin and a memorable jingle bearing the company’s name.

Share.

Comments are closed.