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Goldman Sach’s Private Equity Arm Sold Safe-Guard Products International
By: Barron's | December 19, 2019

Safe-Guard Products International LLC looks like it will be sold to a private-equity firm for a third time.

Stone Point Capital, a financial services-focused private-equity firm, is buying Safe-Guard, a person familiar with the sale said. The purchase price is more than $1 billion, the person said. The seller is Goldman Sachs Group’s buyout arm.

Founded in 1992, Safe-Guard provides third-party extended warranties for vehicles mainly in the U.S. This can include coverage for tire and wheel, dent and dings, and windshields. Safe-Guard said its contracts protect more than 13 million consumers. The Atlanta company employs more than 500 people, its website said.

News of the Safe-Guard sale first appeared on the FTC website on Dec. 17. The Hart-Scott-Rodino Act requires U.S. companies to report any deal valued at more than $90 million to regulators.

Stone Point, of Greenwich, Connecticut, focuses on companies in financial services including asset management, insurance as well as health care services. The buyout shop typically invests between $75 million equity to $750 million equity per transaction, the firm’s website said. Stone Point is marketing for its eighth flagship fund, which has a $6.5 billion hardcap, Private Equity International reported in February. The firm’s prior pool, Trident VII, collected $5.5 billion in 2017, PitchBook said.

Goldman’s investment dates to January 2013 when it completed its acquisition of Safe-Guard from H.I.G. Capital, a press release from that time said. The deal was valued at $375 million, The Wall Street Journal said. H.I.G. made 20 times its initial investment with the sale, the story said.

Goldman has already gotten some of its money back. In March 2017, Safe-Guard paid out a roughly $121 million cash distribution to its shareholders, including Goldman, Moody’s Investors Service said.

Reuters reported in August that Goldman had put Safe-Guard up for sale. Goldman and Jefferies advised on the current process, the person said.

Spokespeople for Goldman and Jefferies declined to comment. Stone Point and Safe-Guard could not be reached for comment.

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