The last month of the quarter was quiet, with only two transactions of any significance being announced, early in the month Towergate announced that it is to acquire Footman James, the classic car motorcycle and van broker from Aon for an undisclosed sum and later in the month Sompo Japan Insurance, the insurance subsidiary of NKSJ, announced it is to acquire Canopius for approximately £600m. The deal is expected to close in the second quarter of 2014 and would be the second largest M&A deal in the Lloyd’s market.
Elsewhere Davies Group, the claims service provider, acquired Garwyn, a specialist liability loss adjuster, for an undisclosed sum, opening up new commercial lines of business for the private equity backed group; Hampden Underwriting acquired two more Lloyd’s members bringing its total to five for the year and adding just over £7m to its capacity and the sale of Lloyd’s insurer Antares has been linked to Novae.
This month has been relatively quiet with more talk about transactions in the pipeline than announced deals. Of deals completed, Markerstudy’s acquisition of 4 Capita companies, BDML, Lancaster, Sureterm and Delta Underwriting takes the headline with an undisclosed value; IMAS advised Markerstudy on this deal. Macquarie acquired a 19% stake in Equity Redstar, Manchester Underwriting acquired Senior Wright Indemnity, Aetna Inc. has agreed to acquire Interglobal Insurance Company, a health insurance specialist, and Towergate has agreed to acquire Footman James from Aon.
Howden, part of Hyperion group, acquired Bar-Ziv Ravid Insurance Group in Israel and Academy acquired PM Hart Insurance in Birmingham. In the related services sector LOC Group, a leading international marine and engineering consultancy, has taken Bridgepoint Development Capital on-board as a minority investor.
Talks continue between LV and Co-op for their insurance operations and Direct Line in respect of Tracker Telematics. Talks that broke down were Swiss Re and Phoenix Group, having failed to agree terms to merge Admin Re with Phoenix.
Significant deals continued in October with Goldman Sachs private equity arm making its first deal in 5 years by acquiring a 50% stake in Hastings, valuing the company at £300m and Markel acquiring Abbey Protection for £116.5m with the intention of maintaining the brand and retaining more underwriting risk.
David Margrett, ex-Willis, returned to the market with a new company, Global Risk Partners, backed by Penta Capital and Peter Cullum and has acquired Towergate Underwriting’s commercial property business for £9.25m. Integro has increased its presence in the specialist UK retail sector with the acquisition of Doodson, an entertainment and sports specialist. Equity Insurance has sold its home & motor broker Equity Direct Broking to the main investor in iGO4, NMG Holdings, and both businesses will work in partnership.
Sovereign Capital, the private equity investor, has made a significant investment in Kindertons, a provider of outsourced motor accident management services company. Overseas, Hyperion acquired PGI Commercial in Florida, USA, JLT acquired ForVision Risk in Taiwan, BUPA acquired Quality HealthCare Medical in Hong Kong and Randall & Quilter acquired Flagstone Alliance in Cyprus from Validus.
Three significant transactions this month, Gallagher announced its agreement to acquire Giles, with revenue of £88.7m in 2012, for £233m; JLT announced that it will acquire Towers Watson’s reinsurance brokerage (revenue of $166m) for $250m and RBS announced it was selling another 18.2% stake in Direct Line for £630m. Gallagher also announced its acquisition of Belmont International, 2012 revenue of £6.9m, for an undisclosed sum. Cooper Gay Swett & Crawford announced the acquisition of Newman Martin and Buchan, revenue of £34m to 31st March 2013, for an undisclosed sum.
Other M&A activity included Quindell continuing its acquisitions with minority stakes in Ingenie & National Accident Repair Services in the UK and PT Healthcare in Canada. Also in the claims sector, private equity firm JZ International, together with Souter Investments, acquired a 60% stake in c.£40m revenue insurance legal services business Winn Group. Elsewhere Brightside has dismissed Markerstudy’s offer and Capita is seeking buyers for the personal lines parts of its Insurance Services business.
This month saw Domestic & General, the £570m GWP home appliance insurer, announcing a secondary buyout, Advent International selling it to CVC Capital Partners, subject to regulatory approval. Private equity investor Dunedin Capital also realised their investment in Practice Plan, selling it to Wesleyan Assurance Society, realising a 2.8x multiple on their investment. Lancashire Holdings has announced that it is in negotiations with private equity firm Alchemy Partners and management to acquire Cathedral Capital for £266m. North of England P&I Association has announced a merger with Sunderland Marine Mutual, Markerstudy has been given an extension on its bid for Brightside until 10th September and Lark and Sutton Winson completed two small purchases.
Overseas, private equity was also active with Hellman & Friedman announcing an agreed takeover of Hub International for $4.4bn from Apax Partners and Morgan Stanley Principal Investments.
July saw Enstar rapidly follow up last month’s acquisition with the announcement of another, larger transaction, Torus, which they are acquiring for $692m in a mixture of shares and cash that brings Torus’ two private equity backers into Enstar’s shareholder base alongside Stone Point. Canopius has acquired Equity’s home and PA books as well as their 25% stake in Arista and Markerstudy has made an preliminary approach for Brightside, the AIM listed predominantly van and commercial vehicle brokerage company at approximately £125m (27p a share).
Smaller transactions were recorded by Towergate (3), Tyser, The County Group and McLarens, while AJ Gallagher has been reported to be in exclusive negotiations in respect of the potential acquisition of Giles Insurance Brokers from Charterhouse private equity.
This month saw the announcement that Bermuda based Enstar had agreed to acquire Atrium Underwriting and Arden Underwriting for $262.2m; it also saw Hertz, the car rental firm, enter the UK motor insurance sector with the acquisition of CCL Vehicle Rentals, an accident management and replacement vehicle provider. Quindell announced the acquisition of claims support company React and Recover for £13m, mainly in shares and said that it expects to slow down its acquisition activity.
June has otherwise been a quiet month with smaller overseas deals being completed by Randall & Quilter in France and Besso in Australia. In the UK, Barbican acquired marine broker Seacurus, Willis sold an SME book to Chesham and S-Tech acquired PI specialist Scott Taylor Associates.
Gallagher opened up the month with the announcement that it had acquired Barbon’s property and commercial book together with its underwriting business Zennor. Jelf announced the acquisition of The Insurance Partnership (“TIP”) for up to £15.5m plus tangible net assets up to £2m. Rob Worrell, Managing Director of TIP, and the senior management will receive a material proportion of their consideration in the form of Jelf shares.
Towergate continues its acquisition strategy with the completion of the transactions with Waveny Insurance Brokers, a £5.2m turnover business with specialism in driving instructors, Youngs Insurance Brokers in Grimsby and Murray Burns & Co in Cleethorpes. Bluefin was back in action with the purchase of Bonsure Insurance Brokers as was Quindell in the insurance outsourcing and technology sector, issuing 66 million shares to acquire Quindell Property Services with further payments in shares if the business achieves £10m profit before tax.
Elsewhere, Aon Ireland has sold a personal lines price comparison site to RSA and Brit is now said to be contemplating engaging on an MBO for Simply Business. With the new legal services structures in place BGL has announced that it is acquiring Minster Law, following Ageas’ partnership with New Law Solicitors and Admiral with its joint ventures with Lyons Davidson and Cordner Lewis forming Admiral Law and BDE Law.
This month it has been reported that Giles Insurance Brokers’ private equity owner Charterhouse has appointed Credit Suisse to conduct a strategic review of the group, Aviva is looking at the Co-op’s general insurance business which is being advised by Deutsche Bank and that private equity house Alchemy has put Lloyd’s insurer Cathedral up for sale.
Completed deals this month include Willis acquiring PI specialist Prime Professions, with all 50 employees joining and private equity house General Atlantic completing its acquisition of 3i’s 22.8% stake in Hyperion for approximately £46m. Quindell continued its acquisition spree with the completion of legal specialist Accident Advice Helpline for £14.97m in cash and 270.67 shares issued at 17.5p making £62m; it also acquired Crusader Assistance and Iter8 Inc in Canada. The Innovation Group acquired Gemini Vehicle Solutions and entered into a strategic partnership with AXA in France.
Towergate continues to acquire, completing the acquisition of Morgan Brokers, with 40 staff based in the South West and Wales and Newbold Barwick. Clear Insurance returns to the market with the acquisition of Steveni Kessler Insurance Services in London and Collinson Group is to acquire Aria Assistance, the UK business recently bought out from Europ Assistance.
Esure was listed on the London Stock Exchange on 27th March with a market cap of £1.2bn, with Electra, an original backer of the Peter Wood MBO, realising part of its investment for £51.5m. The success of this and Direct Line, where RBS has sold shares worth £500m reducing its stake to below 50%, should be encouraging for others contemplating an IPO. The Co-operative Banking Group have sold off their life insurance business to Royal London for up to £219m and revealed plans to sell its GWP £556m general insurance business. Canopius has sold its Bermuda subsidiary for $217m following the decision to retain recently acquired Omega’s Bermuda business. Amlin continues to acquire with Dutch based MGA RaetsMarine being bought into the Group for up to $65m, depending on underwriting performance.
Private Equity continue to show their interest in general insurance with LDC backing the £30m MBO of motor claims specialist Validus, although it has been US led firms that have committed the most to the sector over the last year. Other transactions have been DAS Legal Expenses acquiring legal services firm CW Law Solicitors and Quindell acquiring Isaas Technology for £1.3m cash and £4.5m in shares.
The slow start to the year continues, the largest deal being announced was that of Cooper Gay acquiring Newman Martin Buchan. Hyperion agreed a deal to acquire a majority stake in FP Marine, furthering its expansion into Asia while General Atlantic is thought to be acquiring a 32% stake in Hyperion from existing investors. Bollington has confirmed its MBO from Groupama, Jelf acquired Howell Shone, Abbey Protection has acquired a controlling interest in Lewis Hymanson, a commercial law firm, and Russell Scanlan acquired Henson & Company.
Elsewhere Esure has confirmed that it will be floating on the London Stock Exchange, Markel and Alterra Capital shareholders have voted in favour of their merger and JLT and Lockton have acquired overseas, in Malaysia and Australia respectively. Towergate sells PowerPlace to Open GI.
It has been a slow start to 2013 with the completion of deals previously announced, Aston Scott’s acquisition of the Fyfe Group business from RSA and Stackhouse Poland completing the acquisition of LFC. Aviva continued to sell off investments with its final stake in Delta Lloyd being sold early in the month and its 49% stake in a Malaysian insurer for £152m. On a smaller scale Cobra (Alto Intermediary) acquired a commercial book from Lloyd’s broker Holman’s and Bryan James acquired a book of business to “make it a major player in the equestrian insurance field”.
Market and press reports note that 2 of Hyperion’s shareholders, BP Marsh and 3i, may be realising their investment and that Towergate may be exploring the sale of Paymentshield. Elsewhere Gallagher continued on its acquisition path acquiring 4 US employee benefit groups. Equity Red Star has acquired the renewal rights to Ansvar’s motor portfolio following its decision to exit that market.