Monthly M&A Reviews
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October, 2019

Perhaps not unsurprisingly in a month that had for some time been anticipated as ending with Britain’s exit from the EU, there was a notable absence of large-scale insurance M&A during October. A number of smaller deals however did get done, again demonstrating that political turmoil has had a very limited impact on domestic M&A volumes at the smaller end of the market.

In broking, acquisition-hungry consolidators backed by private equity remain active. Goldman Sachs-backed Aston Lark announced it would acquire Protean Risk, a Lloyd’s broker focused on the investment industry and Pollen Street-owned Specialist Risk Investments (SRIL) added Square Mile Broking to its portfolio, which includes both Miles Smith and the Underwriting Exchange.

A number of the consolidator-owned broking vehicles also announced new acquisitions, including GRP’s South Eastern hub Green Insurance Group acquiring Kent-based Millards Insurance Services, Verlingue-owned Finch acquiring Martinez & Partners (trading as M&P Insurance Solutions) in Hampshire and Ethos-backed Weald Insurance buying Eastbourne-based Cronin Underwood.

Several smaller brokers were also active. Buckinghamshire-based commercial broker and Brokerbility member Luker Rowe acquired Trident Insurance Brokers, South West-based PSP Group acquired nearby neighbour Paul Hicks Insurance Services, M.S. Macbeth acquired Cassey Miller James (trading as CMJ) and newly independent Noble Marine added specialist underwriting agent Yachtline.

Listed specialist private equity investor B.P. Marsh & Partners announced that it was backing newly launched Lloyd’s marine broker Lilley Plummer Risks with a £1 million minority investment and in an all-share deal Tedaisy Insurance Group and Intrinsia Insurance Group announced that they would combine under the Tedaisy umbrella, bringing together four commonly controlled trading entities (Alpha Underwriting, Practice Cover, Intrinsia Brokers and Intrinsia Claims) managing c.£25m of GWP.

Finally, it was reported that Tesco plans to take full control of its insurance business by buying out the 50.1% stake it does not already own in Tesco Underwriting from longstanding insurance partner Ageas UK.

September, 2019

A number of notable transactions were announced in September, not least a rare public to private (“PTP”) takeover with the announcement that Jewel Bidco, a company formed on behalf of funds managed by US private equity firm Lovell Minnick Partners, had made a recommended cash offer for listed professional services group Charles Taylor plc. The offer values the business at approximately £261m and represents a 34% premium to the previous day’s share price.

 In another sizeable transaction that received relatively little media coverage, Lloyd’s broker Integro Insurance Brokers, trading as Tysers, announced that it had entered into a definitive agreement to acquire Risk Transfer Group, the parent company of wholesale broker RFIB Group. RFIB had been owned by US private equity investor Calera Capital since 2015.

 In broking, Ethos Broking-owned Finch Group acquired Bridle Insurance, a £10m GWP broker based in Witney. ECI-backed Clear Group made its largest acquisition to date in acquiring Alcester-based Morrison Insurance Solutions and Arthur J. Gallagher acquired Lettings & Landlord insurance specialist RGA Group, comprising three business – Rentguard, Home & Travel and RGA Underwriting.

Insurer Markel UK announced that it would acquire the online freelancer and contractor business of commercial broker Caunce O’Hara. The transaction – for a book of business comprising 27,000 customers – will bolster Markel UK’s direct business and the company has said it does not mark a shift into broking.

There was continued activity among underwriting agents, where 2019 has seen an increasing level of M&A. CPP Group announced the acquisition of ancillary product provider Business & Domestic from Motorway Direct, H.W. Kaufman Group acquired cyber specialist Node International and the aforementioned Charles Taylor, together with the Standard Club, divested their loss-making managing agency CTMA to run-off specialist Premia.

Finally, in adjusting services the Claims Consortium Group acquired Stream Claims Services. Following the transaction Stream will become Claims Consortium Adjusting.

August, 2019

The month saw a number of small transactions and speculation about larger ones. Penta has now been invested in GRP for 6 years so there has been the inevitable speculation that they will now be looking to realise that investment. There was also speculation about Tysers looking to do a deal with Calera backed RFIB.

GRP continues to be active with the acquisition of risk management firm Health and Safety Click and Aston Lark acquired Buckland Harvester, a Manchester-based commercial broker, extending its regional footprint. GS Group, based in Perth, acquired local broker I & D Insurance Services, based in Alyth. Ethos-owned Finch Group has acquired CFN Insurance Services, trading as Bridle Insurance, a £10m GWP commercial broker based in Witney, Oxfordshire.

PE investor Beech Tree has made an investment in Avid Insurance, a £40m GWP Lloyd’s broker and coverholder, which specialises in the Social Housing sector, Travel and associated insurance, plus Property and Contingency insurance.

Howden Insurance Group has expanded its global business with the acquisition of Columbian employee benefits specialist Restrepo Henao, based in Medellin. SSL Endeavour has strengthened its board with the appointment of Jonathan Palmer-Brown, as Non-Executive Chairman, and Hugh Crossland, as Group CFO, and confirmed that it is finalising the acquisition of Worldlink Holdings, a US aviation brokerage and MGA.

Gallagher Basset acquired the assets of Adjusting Associates, a south Wales-based chartered loss adjuster, and Arc Legal Assistance, a subsidiary of AmTrust International, acquired Legal Insurance Management Group, an ISO 9001-certified specialist in legal expenses, professional fees, home emergency and vehicle breakdown.

July, 2019

July is often a quiet period for M&A as people begin to get away from the office for summer, but the last month has seen a steady flow of announced deals. For once it was not just the ‘usual suspects’ announcing deals (with the exception of the ubiquitous GRP) and a number of acquisitions were made by less active acquirers, a reminder that prospective sellers need to consider acquirers beyond just the handful of most prominent consolidators.

Early in the month the increasingly active Seventeen Group, flush with new financing, announced the acquisition of Walker Perrson & Spargo (WPS), a chartered broker based in the South West. Liverpool-based Mason Owen Financial Services announced the acquisition of Business Insurance Services(BIS) and the aforementioned GRP acquired 3XD, a Lancashire-based broker selling home, landlord and selected other products through financial intermediaries. Also among the among the PE-backed consolidators Ethos (née Broker Network)-owned Saffron Insurance announced the acquisition of Bridge Insurance Services, an Ethos network member based in Cambridgeshire.

There were two notable broking acquisitions by overseas businesses with an existing presence in the UK. In the London market, Australian firm PSC announced an agreement to acquire Paragon for £42 million and US consolidator AssuredPartners acquired Birmingham-based broker Hettle Andrews & Associates.

There was further M&A activity in the MGA space with the most active acquirer in the sector Nexus Underwriting announcing the acquisition of Plus Risk Limited (PRL), a London-based MGA founded in 2017 and focused on liability and niche PI cover.

Outside of distribution, there was also activity among insurers. German legacy acquirer DARAG made its first forays into the UK market with two transactions, acquiring both closed reinsurer One Re and The Underwriter Insurance Company, an insurer in run-off. CVC-backed warranty insurer Domestic & General announced a refinancing and the sale of a minority stake to ADIA, Abu Dhabi’s sovereign wealth fund. This transaction follows D&G’s decision to shelve its IPO plans last month. Finally, on the last day of the month Arch Capital announced its widely trailed acquisition of Lloyd’s insurer Barbican Group from Carlson Capital.

In insurance services, claims specialist Davies acquired specialist forensic investigations business GBBand collision investigation business Banwells. In a notable US claims deal, global firm Sedgwick acquired York Risk Services, another market leading US claims business.

June, 2019

In General Insurance, June was another active month for insurance broking M&A, with four of the consolidators announcing six transactions between them. Carlyle-backed PIB Group announced its 20thdeal since 2016 with the acquisition of Cobra, which includes the Cobra Network business as well as a Lloyd’s broker, retail business and MGA. Seventeen Group acquired medical malpractice and PI specialist Graybrook Insurance, with the support of new financing partner Beechbrook Capital and Tasker Insurance Group made its second acquisition of 2019 with Hobbs Associates, a Midlands-based specialist active across sectors including Technology and Life Sciences.

The other three deals all involved Global Risk Partners subsidiaries, as the acquisitive County Groupacquired two further brokers in the North-West – Meadons and Eric Rawlins & Company – and its GRP stablemate Thomas Sagar Insurances bought commercial lines broker Thomas Cook & Sons.

In a transaction for a book of business, Glasgow-based broker Blackford Insurance added c.£3m of GWP with the Edinburgh-based customer book of TL Dallas. There was also MGA deal activity as Munich Retook control of specialist underwriting agency JRP Underwriting. Munich Re subsidiary ERGO has been the lead capacity provider to JRP for several years. 

Private equity investment in the broking sector continued with London market specialty lines brokerage BMS Group announcing that it had secured new investment from British Columbia Investment Management Corporation (BCI) and Preservation Capital Partners in a deal valuing BMS at £500m.

In capital markets news, gig-economy focused InsureTech company Zego raised $42m in a series B funding round led by Target Global, to fund further European expansion and Broker Network parent Bravo Group reported it had agreed a new £80m loan facility to support further acquisitions, taking its total available loan facilities to over £200m.

Lastly, there were press reports that CVC Capital Partners has shelved immediate plans for a sale or flotation of warranty insurer Domestic & General, which had been widely expected to IPO or be sold to another private equity fund later this year.

 

May, 2019

The last day of the month saw two headline-grabbing insurance transactions, with German insurer Allianz simultaneously announcing the acquisition of Legal & General’s general insurance business for £242m and that it intends to acquire the 51% stake it does not already own in LV General Insurance Group. Taken together, these transactions will make Allianz the second largest general insurer in the UK with 12 million customers.

In broking, Global Risk Partners-owned hub broker Higos made its fifth and largest acquisition since 2017 by acquiring The Insurance Group (TIG), a specialist broker based in Plymouth focusing on residential and commercial property. Leicester based Chartered broker Erskine Murray announced its third deal in 18 months in acquiring Houghton Insurance Bureau in Bedfordshire and high street broker A-Plan confirmed it had bought books of business from Westward Counties Insurance Services and Acer Risk Services, based in Exeter and Glastonbury, respectively.

Private equity firm Dunedin backed the MBO of niche broker Acquis, focused on the finance and leasing industry. Dunedin separately owns Kingsbridge, a broker focused on insurance for contractors. Bowmark-backed Aston Lark announced its widely expected sale to a new private equity backer, Goldman Sachs Merchant Banking.

Rural & Commercial Holdings (RCH Group), part of the Primary Group, announced that it had acquired Precision Partnership, an MGA incubator whose portfolio includes PI underwriter Precision Underwriting and MS Amlin announced that it had acquired a strategic stake in Envelop Risk, a specialist reinsurance MGA.

Two notable minority deals were announced during May, with Madison Dearborn Partners and HPS Investment Partners acquiring additional shares in the Ardonagh Group for £92m and Korean insurer Samsung Fire & Marine making a minority investment in Lloyd’s insurer Canopius.

May also saw the failure of an unrated insurer, as Gibraltarian carrier LAMP Insurance entered liquidation.

April, 2019

The major announcements arrived at the end of what had otherwise been a quiet month, with two well known participants returning to the market with significant new vehicles. Stephen Catlin, together with Paul Brand, Onex Corporation, PSP Investments and a consortium of co-investors, announced the launch of their new international and specialty insurer and reinsurer Convex Group with capital of $1.8bn and based in Bermuda and London. Shortly afterwards Steve McGill, ex-Aon group president, announced the launch of Warburg Pincus-backed specialty risk solutions business, McGill & Partners, with an initial commitment of up to $250m, based in London and New York.

Admiral Group announced a joint venture with Oakley Capital and MAPFRE to combine its Rastreator with Asesor Seguros Online and Asesor Consumer Services (together “Acierto”), bringing together two of Spain’s most regarded digital brokers. Canopius and AmTrust Lloyd’s signed a merger agreement which will create a $2.2bn GWP organisation and make it a top 5 Lloyd’s managing agent; being subject to regulatory approval.

Nexus Underwriting acquired Credit & Business Finance Ltd (a trade credit specialist) and Capital Risks MGA Ltd (a Warranty & Indemnity MGA) after having secured additional funding of £14m from HPS Investment Partners and £2m from B.P. Marsh & Partners. Aston Lark acquired Jobson James Insurance Brokers, with four offices in the Midlands, and its specialist employee benefit practice Jobson James Consulting.

Other transactions were concluded by Ceta Insurance which acquired Love Your Hut from Precision Underwriting (UK), MGA incubator Vibe MGA management was acquired by US-based Pro Global Insurance Solutions from Vibe Group which is backed by Quantum Strategic Partners and Pine Brook Partners. J M Glendenning acquired Ridley Macmillan Insurance brokers, which is based in Scarborough, and Woodgate and Clark owner Van Ameyde acquired marine surveyor and consultancy McAusland Turner.

Elsewhere Aquiline Capital Partners recommitted to backing ERS, believing that it represents a growth opportunity with efforts focused on building book value and increasing earnings and returns.

March, 2019