by B.P. Marsh | Jul 27, 2017 | Portfolio News
B.P. Marsh & Partners Plc (AIM: BPM), the niche venture capital provider to early stage financial services businesses, is pleased to announce that is has acquired a further 17.84% in LEBC Holdings Limited (“LEBC”) for aggregate cash consideration of £7,138,000.
The shares have been purchased for cash from several sellers, including retiring employee shareholders, members of Management via LEBC’s Employee Benefit Trust and Joint Share Ownership Plan and the Founder and CEO, Jack McVitie. Following the purchase, the Company has an aggregate shareholding of 60.87% in LEBC, while the balance continues to be held by Founder and CEO, Jack McVitie and LEBC Management.
LEBC is a financial advisory business with a national network of branches, working with both private and corporate clients. The business has grown strongly in recent years, boosted by investment in technology and by success in targeting the at-retirement market. Year-end results to 30th September 2016 show turnover of £15.4m and trading profit of £2.1m. In the three-year period since 30th September 2013 and following the introduction of the Retail Distribution Review on 31stDecember 2012, turnover has increased 36% (from £11.3m) and trading profit by 184% (from £0.74m).
B.P. Marsh first invested in LEBC in April 2007, taking a 22.5% stake. In 2016 the Group increased its holding to 43.03%.
Camilla Kenyon, the Group’s nominee Director on the Board of LEBC commented: “LEBC is on an exciting growth trajectory, building on solid foundations. We are pleased to increase our shareholding and continue to work with management to grow the business, which we believe occupies a desirable position in the financial advisory market.”
The Group’s usual strategy is to take minority positions, however in this instance the opportunity to make an additional investment in LEBC proved compelling. The increase to a majority position will not result in changes to the management of the investment, with Management continuing to run the business day-to-day. The Group’s shareholder protections remain in place and Oliver Bogue, investment director at B.P. Marsh, will be appointed as an additional Non-Executive Director to the board of LEBC alongside this supplementary investment.
Brian Marsh, Chairman of the Group said: “At B.P. Marsh we invest in management teams with potential and are happy to build those relationships over the long-term. Having spent a decade partnering LEBC we are pleased to make this further investment and look forward to the years to come.”
Jack McVitie, CEO of LEBC said: “LEBC has grown significantly over the past 10 years, consistently improving performance on every financial metric. Our partnership with B.P. Marsh has been the bedrock of that success. We are delighted to be able to extend that partnership and together look forward with confidence to the future.”
This announcement contains inside information, disclosed in accordance with the Market Abuse Regulation which came into effect on 3 July 2016 and for UK Regulatory purposes the person responsible for making the announcement is Sinead O’Haire.
by B.P. Marsh | Jul 19, 2017 | Portfolio News
B.P. Marsh & Partners Plc the niche venture capital provider to early stage financial services businesses, is pleased to note that its investee company Nexus Underwriting Management Limited (“Nexus”), in which it holds an 18.6% shareholding, has announced that it has completed the acquisition of Zon Re Accident Reinsurance (“Zon Re”), a U.S. based Reinsurance Underwriting Agency. In 2016 Zon Re produced a Gross Written Premium of $14.3m, revenue of $3.77m and EBITDA of $2.69m. This acquisition was funded via a proportion of the previously announced £30m loan facility provided by the Company and HPS Capital Partners.
Zon Re has partnered with the largest and most respected insurance companies in the U.S., being Zurich, Liberty Mutual and Federal Insurance Company (Chubb & Son). Zon Re currently oversees a portfolio of approximately $15m in Gross Written Premium and has an average historical combined ratio of 68% delivering over $77m in underwriting profit to risk partners over the past 12 years.
Zon Re is a management owned Reinsurance Underwriting Manager founded in 2003 and is run by Kieron Farrelly (Executive Vice President and Chief Underwriter), Chris Holland (Vice President and Senior Underwriter) and Vern Ismen (Senior Vice President and Compliance, Claims and Contracts).
Zon Re offers domestic and international reinsurance capacity in the accident reinsurance space, specifically for primary life, property & casualty and accident & health. This acquisition, based in New Jersey, is Nexus’s first in the U.S., and adds Treaty Reinsurance as a new class within Nexus’ business offering.
Nexus underwrites a number of specialty products on behalf of underwriting partners that support its product offerings within the following lines of business: financial lines, trade credit, accident & health, surety, travel, property, latent defect, marine and cyber. This is the third and final of three currently planned acquisitions from Nexus, the first two being the marine cargo specialist Vectura Underwriting and the trade credit specialist Equinox Global, as has been reported by the Company over the past couple of weeks.
These acquisitions will increase Nexus’s financial forecasts for 2017 as follows: Gross Written Premium will increase to a forecast of £160m, commission income to a forecast of £30m and EBITDA to a forecast in excess of £11m.
By way of background, since the Company’s investment in 2014, Nexus has grown its Gross Written Premium income from £56m in 2014 (2017F: £160m), a forecast increase of 185%. In the same period, commission income has increased from £12.3m(2017F; £30m), a forecast increase of 143%, and EBITDA has increased from £2.6m (2017F: £11m), a forecast increase of 323%.
Nexus’s Chairman Colin Thompson stated; “Following on from the successful conclusion of Nexus’s capital raising process last week, Zon Re fits the model of profitable, proven, niche MGAs, that we plan to target with our “buy and build” strategy, which will deliver significant EBITDA and value to the Nexus group.
This is the third acquisition Nexus have exchanged on or completed in the past month, following the purchase of Equinox Global last week and Vectura Underwriting at the end of June. These acquisitions cement Nexus’s position as a multi-product, multi-class, multi-geographic ‘virtual’ insurance company.“
Daniel Topping, B.P. Marsh’s Chief Investment Officer and the Company’s nominee director on the Board of Nexus commented; “B.P. Marsh is pleased to see this round of M&A activity concluded, having provided the Loan Facility, alongside HPS Capital Partners, for these acquisitions to take place. From a revenue and profitability standpoint these acquisitions should prove to be transformational and we look forward to integrating them into Nexus’s existing business”.
by B.P. Marsh | Jul 18, 2017 | Portfolio News
B.P. Marsh & Partners Plc (AIM: BPM), the niche venture capital provider to early stage financial services businesses, is pleased to note that its investee company Nexus Underwriting Management Limited (“Nexus”), in which it holds an 18.6% shareholding, has announced that it has acquired Equinox Global Limited (“Equinox”), a Trade Credit Managing General Agent with Lloyd’s Coverholder approval. In 2017 Equinox is forecast to produce gross written premium of £20m, revenue of £5.1m and an EBITDA of £0.7m. This acquisition was funded via a proportion of the previously announced £30m loan facility provided by the Company and HPS Capital Partners.
Established in 2009, Equinox is majority owned by management and staff, alongside the global insurer, the Beazley Group, which owned 37%. Following the acquisition of Equinox by Nexus, Equinox will continue to have underwriting capacity from Beazley, via a 10 year underwriting support agreement.
Equinox has offices located in London, New York, Paris, Hamburg and Amsterdam. The business will continue to be run by Equinox’s founding shareholders and management team.
The combination of Nexus and Equinox will result in Nexus having a profitable trade credit insurance offering of £60m in terms of gross written premium.
Nexus underwrites a number of speciality products on behalf of underwriting partners that support its product offerings within the following lines of business: financial lines, trade credit, accident & health, surety, travel, property, latent defect, marine and cyber.
Nexus’ Chairman Colin Thompson stated: “Equinox and Nexus’s books of trade credit insurance business are complementary, with very little overlap, both in terms of line sizes and geographical focus, resulting in significant opportunities to expand globally by harnessing the joint distribution channels following the transaction.”
Daniel Topping, B.P. Marsh’s Chief Investment Officer and the Company’s nominee director on the Board of Nexus commented: “We are delighted with the acquisition by Nexus. Not only have they acquired a first rate team of seasoned professionals, but have also created an operating division which is the largest trade credit underwriting agency internationally.”
by B.P. Marsh | Jul 13, 2017 | Portfolio News
B.P. Marsh & Partners Plc, the niche venture capital provider to early stage financial services businesses, is pleased to announce that it has provided Nexus Underwriting Management Limited (“Nexus”), in which it holds an 18.6% shareholding, with a £4m Loan Facility, as part of a wider debt fundraising exercise, in order to undertake M&A activity.
In addition to the facility from the Company, Nexus has secured a £26m Loan Facility from funds managed by HPS Investment Partners, LLC (“HPS”). HPS is a leading global investment firm.
The funding provided by both B.P. Marsh and HPS results in Nexus securing a total of £30m in loan facilities.
Since the Company’s original investment in Nexus in August 2014, Nexus has undertaken a number of acquisitions, alongside substantial organic growth. This has seen Nexus increase its Gross Written Premium Income from £56m in 2014 to a forecast of £125m in 2017, a forecast increase of 123%. In the same period, EBITDA increased by a forecast 181%, from £2.6m to a forecast £7.3m.
Nexus have a number of further M&A opportunities in the pipeline and will drawdown on the £30m loan facilities as and when required over the coming months. Further information will be released when it becomes available.
Nexus’ Chairman Colin Thompson stated; “This debt raising provides Nexus with the ability to satisfy our short-term plans of creating a virtual insurance company through a buy and build strategy focusing on profitable, niche MGA’s.”
Daniel Topping, B.P. Marsh’s Chief Investment Officer and the Company’s nominee director on the Board of Nexus commented “Nexus operates in a fast paced and dynamic area of the London and international insurance market and the provision of this funding will allow Nexus the opportunity to further develop its position as the pre-eminent specialist underwriting agency. This Loan Facility demonstrates B.P. Marsh’s belief that Nexus continues to gain substantial momentum for the future”.
Recent Comments