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March 2013

GWC Warranty Corporation

The Transaction

On February 20, 2013, CIVC Partners, LP, a middle market private equity firm focused on investments in the financial services and business services sectors, completed the successful sale of GWC Warranty Corporation (“GWC” or the “Company”) to Stone Point Capital LLC.

The Company

GWC, headquartered in Wilkes-Barre, PA, is a best‐in‐class marketer, administrator, and underwriter of vehicle service contracts sold through automobile dealers. GWC markets its products through a highly differentiated distribution network that leverages an in-house sales force as well as strategic partnerships with independent agents and finance companies. GWC sells through a base of over 3,000 dealers across 40 states.

Value-Add Approach

CIVC identified GWC as a platform investment as a result of the firm’s industry immersion initiative in the automotive warranty sector, which combines proactive research and proprietary origination of investment opportunities. In partnership with management, CIVC acquired GWC on a proprietary basis outside of an auction process. CIVC leveraged its long history in financial services and extensive research on the automotive warranty sector to facilitate a comprehensive growth plan. As examples, CIVC worked closely with senior management to launch new products which now account for over 30% of revenue, expand the geographic footprint from 27 to 40 states, and add new distribution channels through partnerships with auto finance companies and independent agents.

The successful sale of GWC highlights the benefits of CIVC’s proprietary origination process, value-added approach, and specific affinity area expertise. It also builds on the firm’s experience in the financial services industry and, more specifically, the automotive warranty, finance and insurance sector. In October of 2011, CIVC acquired Honor Finance, an automotive finance company serving non-prime customers. Also, in December 2011, CIVC sold Innovative Aftermarket Systems, another leading automotive finance and insurance provider focused on ancillary vehicle protection products.

CIVC Partners

CIVC is a seasoned private equity firm investing equity capital in high growth companies for over forty years. The firm manages over $1.3 billion in private equity funds and focuses on companies operating within the business services and financial services industries.

More information on CIVC Partners and its portfolio companies can be found at www.civc.com. To discuss opportunities in the automotive finance and insurance sector, or generally in the financial services industry, please contact Scott Schwartz.

 
 
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