GoAuto car insurance company bought by Pennsylvania private equity firm [The Advocate, Baton Rouge, La.]

May 26—GoAuto — the low-cost car insurance company based in Baton Rouge best known for its TV commercials featuring its CEO and founder, Greg "the GoAuto Guy" Tramontin — has been acquired by a Pennsylvania private equity firm.

Milestone Partners bought GoAuto and its technology platform, Adaptive Information Technologies, through a specialty auto insurance holding company called Drive Assurance Holdings. Terms of the deal were not disclosed.

Tramontin said the acquisition should not affect policyholders or the company's staff. He said he plans on staying as CEO, and his management staff will remain as well.

Tramontin indicated the grind of building an auto insurance company from the ground up — his second such effort — has worn him down a bit.

"This is something that we had taken quite a ways," he said. "It was kind of an exit strategy for myself. We started this in '09, and you kind of get tired. We decided to test the market. There was quite a bit of interest."

GoAuto, founded in 2009, has 70 storefronts and operates in Louisiana, Texas, Nevada and Ohio. Its 3.99% market share for auto liability policy premiums was the seventh highest in Louisiana in 2020, according to the latest available data from the state Department of Insurance. That amounted to nearly $122.5 million in premium payments.

For physical damage auto policies, GoAuto was eighth in Louisiana in 2020 with a 2.65% market share, or $44.5 million in premiums. Auto liability policies cover damage caused by an insured driver, while physical damage policies cover damage to the insured driver's vehicle.

Tramontin said the company had been looking for a buyer for at least a couple of years. GoAuto hired investment bank Piper Sandler to search for one. The hunt yielded Milestone Partners, whom Tramontin called "down to earth, very nice people, and very, very smart."

What followed was a "grueling" 15 months of due diligence work. It would have been completed sooner if not for inflation and the COVID-19 pandemic. "It just dragged on for a while," Tramontin said. "But in the end, we got it done."

Tramontin said the acquisition could lead to an expansion for GoAuto. Milestone Partners plans to acquire two or three similar car insurance companies and roll them under the GoAuto umbrella.

"There's no downside to the policyholders. There could actually be an upside," he said.

Milestone advertises itself as a private equity firm that targets niche companies in the insurance, specialty finance, payments and capital markets sectors. Its portfolio includes firms that offer "tech-enabled solutions" and "tech-driven manufacturing," according to the company's website.

The advantage GoAuto offers, according to Tramontin and Milestone, is its software platform.

Tramontin and James Holland, his partner at Adaptive Information Technologies, developed an ease-of-use online platform for insurance customers when Tramontin started USAgencies, his first low-cost car insurance firm, in 2004. He sold the business in 2007, and he and Holland spent the next two years — while under a non-compete clause — further tweaking the platform.

The platform makes it easier to modify policies, Tramontin said. Customers can update their coverage and add or subtract vehicles on their phone, on a computer or in a GoAuto store.

In a statement, Milestone Partners hailed the software and its ability to use data when writing policies for customers.

"GoAuto's proprietary software enables superior customer analytics and data-driven operations that have established them as a market leader," Milestone partner Adam Curtin said in a statement. "We look forward to working with the management team on executing their strategic initiatives."

Aside from its low-cost policies, GoAuto stood out in the Baton Rouge market for its TV and radio commercials that showcased Tramontin and a memorable jingle featuring the company's name.

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