IMAS has advised on four announced UK M&A deals since the New Year and, touching a large piece of wood, expects more to follow shortly.
For most of our clients employing us seemed like a big step. Can selling a business really be that complicated? Without exceptions our clients are highly appreciative of what we do for them. In part this is because the actual process is far more complex than they ever anticipated at the outset.
Complications invariably arise. Timetables have to move. And there are some factors that are out of everybody’s control. One of our transactions, yet to be announced, received FCA approval for the change of control within three weeks of making the application, but another has been waiting well over three months for the same thing, with no real sense of when it might come through.
Sellers see headline numbers, but the reality is that different buyers offer very different structures that can make comparisons complex. More importantly sellers may unwittingly seek mutually exclusive outcomes from a transaction.
Two weeks ago, we talked to a major US consolidator looking to enter the UK for the first time. As they have no “boots on the ground” here, a central tenet of their proposition is that the management of any business they acquired would have to remain in place and continue to hold a meaningful stake.
Owner/managers looking to sell out in full and then make a relatively rapid exit should understand that this would almost certainly preclude such a new entrant, who would never be the right buyer for their business.
Selling involves trade-offs. A quality adviser who understands the industry will articulate these so you can make appropriate and informed decisions as the process goes from stage to stage. If you are told you can have your cake and eat it, you are being poorly advised.
We are always happy to meet to discuss how to maximise value, but also to help explain some of the possible trade-offs clients should consider to meet their objectives most effectively.
Insurance
February was a relatively lively month for UK insurance M&A, with ten new announced deals to report on involving a number of medium sized targets and several smaller deals in the distribution segment.
As with most months, Global Risk Partners were again active, announcing the acquisition of Shropshire-based commercial broker Henshalls Group and, via group company Hamilton Fraser, adding Edmondsons, a London-based broker specialising in property and legal indemnity insurance.
Elsewhere amongst the ‘usual suspects’, Aston Lark (now of course part of Howden) announced that it had acquired Allegiance Insure in London, and Howden announced that it had acquired Reich Insurance Group in Manchester, and in a separate transaction, both the bloodstock broking team and MGA Galileo Underwriting from AUB-owned Tysers.
J.M. Glendinning was also (indirectly) active, with its Scottish subsidiary Greenwood Moreland announcing that it had taken over the business of Kingdom Insurance Services in Fife. Clear Group announced that it had acquired another member of its owned Brokerbility network with a deal for IFM Insurance Brokers in Sheffield, and Jensten Group continued its recent string of acquisitions with Darwin Clayton, a schemes broker based in Tunbridge Wells.
Amongst the less well-frequent acquirers, BEAM Insurance (a trading name of JPM Insurance) in the West Midlands acquired Andrew Phillips Insurance Brokers (AP Insurance Brokers) in Redditch, and Specialty MGA UK added ForestRe, an MGA focused on the global commercial forestry sector.
Investment
The investment sector saw plenty of M&A news in February, driven by high-profile announcements including NatWest’s £144m acquisition of a majority (85%) stake in workplace savings and pensions fintech business, Cushon, and Liechtenstein-based LGT’s £140m acquisition of Abrdn’s DFM business, Abrdn Capital. It was also reported that Santander is in discussions with Abrdn to acquire its private equity arm.
Interest in financial planning and advice businesses did not slow. One Four Nine completed its largest acquisition to date, taking its assets to over £1.3bn, with the purchase of Glasgow-based financial planning firm McCrea Financial Services. Solomon Capital Holdings acquired a minority stake in Kent-based advice firm Beaufort Financial Westerham, further progressing its ‘hub and build’ strategy, and bringing £409m in AUA and seven advisers to the group. Openwork Partnership financial planning practice, The Penny Group, announced that it acquired Chertsey-based advice firm Bright Blue Wealth, resulting in its AUM growing to £750m.
There was also activity in other parts of the sector with Evelyn Partners expanding its presence in the North of England with the acquisition of accountancy firm Leathers LLP, and Investec completing the purchase of Edinburgh-based Murray Asset Management. Maven Capital Partners exited its position in Titan Wealth Holdings yielding an IRR “of more than 100%” for investors, by selling its stake to US private equity firm Parthenon Capital, with Parthenon set to become Titan’s major shareholder. Link Group, the owner of Link Fund Solutions (former corporate director of the collapsed Woodford Equity Income Fund), is said to be in negotiations to sell the fund solutions business to Waystone Group. It was also reported that platform technology provider FNZ took a 7% stake in Nucleus prior to the platform’s takeover of SIPP provider Curtis Banks.
In other news, shares in Australian-listed Bravura, which provides technology to adviser platforms M&G Wealth and Fidelity Adviser Solutions, were suspended from trading pending the release of an announcement, prompting rumours of a takeover. Bravura deferred announcing its half-year results but confirmed that it is currently awaiting the outcome of a potential capital raising. Exo Investing, the robo-adviser and direct-to-consumer platform will be shutting down its UK operations, nine months after Abrdn abandoned plans to acquire the company.
*IMAS Corporate Finance LLP has been acquired by MarshBerry.
