Kwik Fit Group Limited has announced that it has entered into a binding agreement to sell its UK Insurance business KFFS to Fortis UK Limited for £215 million in cash.

The transaction is subject to regulatory approval and is expected to be completed in the third quarter of 2010. It marks the successful completion of a strategic review for the KFFS business announced in February 2010. Credit Suisse advised Kwik Fit in connection with the transaction.

Ian Fraser, chief executive of Kwik-Fit, said: “The sale of the UK Insurance business at an attractive price enables the Group to reduce debt significantly and to invest further in our core fast-fit business.

“As we expand the services and products we offer, Kwik-Fit is playing an increasingly important part in keeping our customers motoring safely and at an affordable price.”

Proceeds from the sale will be used to repay debt which, together with funds injected into the business as part of the recently completed covenant reset exercise, will reduce net bank debt to £486m.

The company says it will significantly strengthen its balance sheet, leaving it in a strong position to exploit growth opportunities in its core fast-fit businesses.

The Kwik-Fit Group, excluding KFFS, achieved sales of £364 million in the first five months of 2010, representing growth of 5.9% as compared to the same period in 2009.