Global investment lender Goldman Sachs’ private equity arm has inked an agreement to acquire 50% stake in UK car insurer Hastings Insurance Services, in a transaction valued at approximately £350m ($562m).

The current transaction, which will be paid in a grouping of equity and debt, has valued the entire motor insurance company at £700m.

Goldman’s merchant banking division (GS MBD) has provided the funding for purchasing of 50% stake. The remaining share will be owned by the management of Hastings, media sources reported.

Goldman Sachs Merchant Banking financial services global head Sumit Rajpal said, "Hastings has a unique business model, well equipped for the digital age, with ambitious targets for continued growth."

"We have been extremely impressed by the quality of the Hastings management team and by what they and the founding shareholders have achieved over the past few years."

The deal comes after the recent flotation of the UK’s motor insurers Direct Line by Royal Bank of Scotland (RBS), which valued the business at £3.09bn.

Evercore Partners and Peel Hunt served as advisers to Hastings on the deal, while Goldman Sachs International worked as financial adviser to GS MBD.

As of 30 June 2013,Hastings Insurance has had 1.3 million customers, an increase year-on-year of 17%, and generated pre-tax earnings of £83.3m. The company has a workforce of 1,500.

In August, it was reported that Goldman Sachs was considering the divestment of a majority stake in its European insurance operations, also known as Rothesay Life, which had $9.66bn in assets as of 30 June 2013, over the next one year.

Goldman Sachs Merchant Banking is part of the Wall Street investment bank’s principal investments division and since being founded in 1986 has raised funds worth more than $80bn (£59bn) to invest in companies across the world.