Innovation Group confirms Carlyle Group takeover talks

Insurance software provider The Innovation Group PLC has confirmed advanced talks with private equity firm Carlyle Group over a potential offer valuing it at 40 pence per share.

The company provides motor and property claims process services, enabled by specialist software technology that it also sells on a standalone basis.

A deal at 40 pence per share values Innovation Group at about £500 million.

A takeover would cap a significant turnaround for investors who have stuck with Innovation since it was valued at approximately £50m just over six years ago.

It will also provide a stark contrast with the fortunes of Quindell, another business process outsourcing provider which has had a torrid year culminating in the launch of an investigation by the Serious Fraud Office.

Innovation was founded by Rob Terry, who later went on to set up Quindell but who suffered similarly ignominious exits from both companies.

He was ousted from Quindell last year amid doubts about its accounting practices that a new management team has only recently been able to start allaying.

Innovation Group, which employs more than 3000 people in the UK, Europe, North America, Asia and South Africa, counts 15 of the top 20 insurance markets among its clients.

The company is run by Andrew Roberts, who is expected to reap a multimillion pound pay-out from the takeover.

Carlyle has until September 25 at 1700 BST to make a firm offer or walk away.

Confirmation of the talks followed a report on the move from Sky News.

Innovation Group shares jumped by 9.1% to 38.44 pence following the news.