Last week I spent a day in the Northwest with a client planning for their sale in some 15 months’ time. We are keen to spend time working with them on preparing the business well ahead of the transaction to help the client boost the sales price and identify possible issues that could derail a process.
We covered a wide range of issues, including management structure post deal, the impact of client concentration and how this might be mitigated, the benefits and issues involved in having a bespoke IT system etc.
Much of the conversation was around the need to – as far as practicable – de-risk the transaction for the buyer. This can come as something of a surprise for our clients, as they see managing such risks as part and parcel of being in business. But of course, the lower the risk for the buyer, the higher the multiple they can apply in valuing the business and the less onerous any earn-out needs to be. Minimising the risks for a buyer is a key part of any well thought through sales process.
Small changes made now can have a disproportionate impact in 15 months’ time. Good advice pays for itself many times over. The earlier discussions start, the greater the opportunity to benefit from that advice. This is why we welcome early engagement well in advance of the actual decision to commence a formal process.
We would be delighted to discuss your plans to sell in the future, be that in three months or in three years.
Insurance
November marked a relatively busy month for new announced UK insurance M&A with ten new transactions to report on and no fewer than five of the established broking consolidators announcing new deals in the month.
In commercial broking, Synova-backed JMG Group (J.M. Glendinning) announced two new acquisitions, adding Premier Insurance in county Durham and Wokingham-based BJP Insurance Brokers, taking the group’s GWP to above £200 million. Global Risk Partners was also active, announcing its largest acquisition since its takeover by Brown & Brown earlier this year with a deal for C.C. Flint & Company (trading as Flint Insurance) in Kent.
Two commercial broking deals in the month involved PI-focused brokers. Ardonagh Advisory announced a deal for The Professional Broking Group (trading as The Professional Indemnity Company) in Chester, and AssuredPartners UK added Devon-based Anchorman Insurance Consultants. Stay classy.
Away from the ‘usual suspects’ there were two notable transactions involving privately owned brokers, with Robin Plaster’s One Broker Group announcing a deal for local competitor Uttings Insurance Brokers in Norwich, and The Needham Group acquiring Corporate Insurance Solutions in Lutterworth.
There were two small MGA transactions to report on, with Stubben Edge Group adding MGU Cedar Underwriting, and iprism Underwriting announcing its first acquisition in a deal for Metier Trading Limited (MTL), which trades as Metier Underwriting.
In a rare personal lines transaction, PIB Group announced a recommended cash offer for Jigsaw Insurance Services in Harrogate. Jigsaw is active across the Motor, Pet and Breakdown segments and the transaction is subject to the Takeover Code, as a result of the business having previously had a public listing.
Investment
M&A activity across the Investment sector showed no signs of slowing down in November. In the wealth management sector, Schroders-owned Benchmark Capital bought Milton Keynes-based Advison and took a 49% stake in chartered financial planning firm, Chartered Independent. AIM-listed Kingswood announced a trio of acquisitions, including Strategic Asset Managers, Employee Benefit Solutions and JCH Investment Management for £5.1m, £5.1m and £3.5m, respectively. Private equity-backed IFA-consolidator Progeny announced the acquisition of chartered financial planning practice, Lewis Brownlee Financial Services, expanding its presence in the south of England. Radiant Financial, sponsored by private equity firm Apiary Capital, acquired Dudley-based TWM.
Elsewhere in the sector, it was reported that TA Associates has hired Goldman Sachs to explore a possible sale of Russell Investments, which currently manages $293bn in AUM. Advice network In Partnership, owned by Russell Investments, was separately, reported to be up for sale. Global investment bank Houlihan Lokey acquired Oakley Advisory, an independent advisory firm, servicing clients across the digital infrastructure, communications services and cloud landscape. Manchester-based Zeus Group announced the acquisition of Arden Partners from its current owner The Ince Group, for £3m, enlarging its client base and sales and trading capabilities. LSE-listed Alpha Growth acquired Havelet Assignment Company, a Barbados-based financial services company, specialising in settlement assignments. It was also reported that wrap platform Nucleus Financial is in advanced discussions with the board of Curtis Banks, regarding a possible cash offer for the SIPP provider.
*IMAS Corporate Finance LLP has been acquired by MarshBerry.
