Having spent some 30 years advising clients on their own sales, we have recently been through a sales process ourselves. So, instead of telling people what the medicine is going to be like, we have now had the actual experience of tasting it ourselves. Whilst our combination with MarshBerry was announced in October last year, completion (the sugar lump(?)) has only just happened following the recent approval of our change in control by the FCA.
Our lawyers were surprised we did not spend more time poring over the minutiae of the terms of the transaction. But, this reflects our experience that a strong commercial logic and fit help parties to efficiently reach pragmatic solutions that avoid the quagmire of the precise form of the legal documentation.
MarshBerry has bought IMAS, but actually they are investing in the people. And we have invested in MarshBerry. There may be issues that arise as we combine our business with theirs that are not covered by the sale and purchase agreement. However, we can be confident that our common interests will provide a balanced solution. Indeed one such matter has already arisen and is being dealt with to our complete satisfaction.
We always advise our clients of the benefits – where it is practicable – of combining exchange and completion. However, deals gain momentum and, if FCA approval is not forthcoming, splitting exchange and completion can be the right thing to do. We often describe the FCA as something of a “black hole” in the context of a change in control approval while they take their time to opine can appear to follow no rhyme or reason. What we now realise is that it feels as if one is actually in the black hole, or caught in no man’s land, when awaiting the approval to come through.
And the sales process is immensely distracting. We took advice/assistance and paid for it. Maintaining service quality and continuing to grow the business is far more important than saving a couple of per cent in what is ultimately a one-off transaction.
So when you talk to us, not only do we offer you unparalleled access to the UK, US and European markets, we have also been there.
Insurance
2024 got off to relatively lively start for UK Insurance M&A, with several new announced transactions to report on. The majority of January’s transactions were at the very small end, which is a continuation of a trend seen throughout 2023, when the volume of new sector transactions was surprisingly high, but the average transaction size reduced considerably relative to previous years. The manner in which many buyers and the trade press report on sector deals can fail to make clear just how small many of the acquired businesses actually are. We will be reporting more fully on this trend on our 2023 sector annual review, due to be published in a few weeks’ time.
Among the ‘usual suspects’ in commercial broking M&A, Howden announced a deal for Scottish broker Laurie Ross, AssuredPartners (via subsidiary Borland Insurance) announced a deal for Gibson Hawick, also in Scotland, and Ardonagh added HNW specialist Hoxton Risk Services, in Essex. Ardonagh was also a seller during the month, announcing a deal to divest captive and insurance management firm Robus to Strategic Risk Solutions (SRS).
When it comes to smaller broking deals, the large and better-known PE-backed consolidators in the UK market compete with an increasingly active cohort of smaller, privately held buyers. Two of these buyers were active in January. Adler Fairways Insurance announced two new acquisitions – ACM Broking in St Albans and Primassure in Southend-on-Sea – and Peter Cullum’s The Broker Investment Group acquired Bullerwell Insurance, in Bedford. Other commercial broking deals away from the mainstream buyers in January included Pivotal Growth, a JV between LSL Property Services and Pollen Street Capital, acquiring Select Brokers in Northern Ireland, and Malago Insurance Brokers in Bristol announcing a deal for Mulberry Insurance Brokers.
In personal lines, major French broker April Insurance announced the acquisition of motor specialist Lexham Insurance, best known for its expertise as a provider of two-wheeled (particularly scooter) cover. Acquisitions of UK brokers by continental European buyers remain relatively rare, but the deal demonstrates the importance of considering potential buyers from beyond just the UK and US.
There was a flurry of new deal announcements in the first few days of February, with buyers including J.M. Glendinning, Jensten Group and Clear all active. Although these announcements almost certainly relate to month-end deals in January, for consistency in our reporting and statistics we will wait until the February newsletter before reporting on these.
Investment
M&A volumes in the investment sector picked up where they left off in 2023 with continuing high levels of activity in the wealth management sector. Söderberg & Partners bought minority stakes in three firms: Bath-based Fidelius with £2bn of client assets; London-based Vintage Wealth Management with £1.1bn of client assets; and Croydon-based PK Financial with £150m of client assets. Finli Group, formerly known as Solomon Capital Holdings, acquired Glasgow-based IFA Clark Gillone, adding £815m of client assets, while Prosperis bought Newcastle-based IFA Stephen McDine, adding £450m of client assets. Craven Street Wealth announced the acquisition of Punter Southall Aspire’s financial planning business to increase its total AUA from £1.2bn to £1.8bn and add offices in Oxford, Bedford and Bournemouth. Progeny announced it had purchased HNW advice firm Chartered Wealth Management, taking its total client assets to £9bn. Succession Wealth announced it had added £165m of client assets with the acquisition of Plymouth-based DFP Health & Wealth, while Pivotal Growth announced it had acquired Northern Ireland-based mortgage advice specialist Select Mortgages.
In the asset management sector, Mattioli Woods, the specialist wealth and asset management and employee benefits business, saw Custodian Property Income REIT, to which its subsidiary Custodian Capital acts as discretionary investment manager, propose an all-share merger with abrdn Property Income Trust to form an income-focused property investment strategy fund with a combined portfolio of over 200 properties with an aggregate value in excess of £1.0 billion. Specialist global equities and emerging markets fund manager Aubrey Capital Management announced it would sell a 25% stake to Chile-based LarrainVial Asset Management.
Elsewhere in the sector, Panmure Gordon, the investment bank backed by former Barclays chief executive Bob Diamond, announced an all-share merger with its peer Liberum to create Panmure Liberum and become the largest adviser to London-listed companies with over 250 retained corporate clients. Investment technology and services provider Fintel announced it had acquired Owen James Events, a financial services events company, for £2.3m.
It was also reported that M&G is putting its adviser platform up for sale following a strategic review of its wealth arm. The decision to sell the M&G Wealth Platform, formerly Ascentric, comes just over three years after M&G bought it from Royal London for £86m.
*IMAS Corporate Finance LLP has been acquired by MarshBerry
