Liverpool Victoria Financial Services Limited (LV=) has agreed to sell its savings & retirement and protection businesses to private investment firm Bain Capital in a transaction valued at £530m.

The transaction will take place in two phases, with Bain Capital first purchasing LV=’s subsidiary LVLC together with the administration and new business infrastructure.

It is expected to close by the end of next year, subject to the conclusion of the legal process and necessary approvals.

As part of the agreement, LV’s with-profits business will be ring-fenced in a separate fund and closed to new business.

For LV=, the transaction is anticipated to increase the capital available for distribution up to 40%. The company will use it to increase the payments to with-profits members as their policies mature.

Commenting on the deal, LV= chairman Alan Cook said that the transaction is the culmination of an extremely thorough and robust strategic review.

Cook said: “As a newly standalone life and pensions business in an increasingly competitive market, the Board recognised that LV= required significant long-term investment to be sustainable.”

The deal will provide LV= with the external investment required to expand its business and offerings for the continued benefit of customers and IFAs.

LV= CEO Mark Hartigan added: The partnership with Bain Capital recognises the opportunity to further invest to develop LV= at a time when it is well positioned, growing market share, expanding its products and trading resiliently, despite the pandemic.”

Bain Capital Credit global head of Insurance Matt Popoli said:  “We are delighted by the opportunity to provide long-term support to LV=’s Board of directors and management team on this transaction, which delivers certainty and value to LV=’s members.”

In September this year, LV= said that it is in talks over a possible takeover by The Royal London Mutual Insurance Society.