China's CDH exits CNinsure via share buy-back

The private equity firm is offloading 7.7 million American Depository Shares (ADS) at $7.00 apiece to Kingsford Resources, a company owned by members of CNinsure's management, according to a filing. Their interest in the business will rise from 3.1% to 16.6%. The company's chairman, Yinan Hu, owns 16.8%.

CNinsure started out as provider of automobile services, such as car rental and breakdown support, and entered the automobile insurance space in 1999. Cathay Capital Group took a 40% stake in the business, then known as known as China United Financial Services, in 2001 and swapped this for a 27.8% interest when the company restructured offshore.

CDH paid approximately $18 million for a 26.4% stake in 2005 and the company went public on NASDAQ in 2007, raising $189 million. CDH and Cathay owned 19.6% and 32.9%, respectively, post offering.

In 2010, Cathay exited the 14.2% stake it still held, distributing the equity to LPs as dividends. As of April 2011, CDH retained 12.4% and the following month it teamed up with TPG Capital and Hu to submit a take-private offer that valued the company at approximately $953 million. The bid was withdrawn in September 2011.

CNinsure is now a leading independent intermediary and online insurance service provider, distributing a variety of property and casualty and life insurance products underwritten by domestic and foreign insurance companies operating in China. As of year-end 2013, it had 53,000 sales professionals, 1,400 claims adjusters and 492 sales and service outlets operating in 28 provinces.

The company reported a net income of RMB99.9 million ($16.5 million) in 2013, down from RMB124.7 million the previous year. Revenues rose from RMB1.58 billion to RMB1.75 billion over the same period.

"I would like to, on behalf of the management, extend our deep gratitude to CDH for their support and trust in the company in the past decade, which has contributed significantly to the growth of CNinsure from a regional insurance agency to become a leading insurance intermediary in China," said Chunlin Wang, CEO of CNinsure, in a statement.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Exits
• Financials
• Greater China
• Buyback
• Exit
• China
• Financial Services
• CDH Investments Management