No US or UK IPO – yet, says chief exec Esser
Cooper Gay chief executive Toby Esser has dismissed press reports that his firm is planning an initial public offering in the USA next year, as the proposed merger with US wholesale broker Swett & Crawford will require a rethink of the group’s listing plans.
“Part of the strategy is an IPO at some stage, but we haven’t even sat down and thought about whether it is US or UK,” said Esser. “When we looked at listing a year or so ago, we did examine both markets and we concluded the UK was probably best at that time. But with the deal we’re doing with Swett, all bets are off. We need to start all over again.”
He added that speculation around a US listing was probably prompted by the fact that Cooper Gay’s latest acquisition target is based in the USA.
Last week, Cooper Gay revealed plans to merge with Swett & Crawford, which was spun off from Aon in 2005, creating a group with a combined premium of $3.5bn (£2.4bn). Esser said this would make it the world’s biggest wholesale insurance broker. The two firms plan to complete the takeover deal by the end of June.
The combined entity will be domiciled in the UK and run by Esser. Swett & Crawford’s senior management team, led by chief executive Neal Abernathy, will run the group’s US business, including Cooper Gay’s existing interests in the country. The merger was prompted by Cooper Gay’s desire to tap into the US wholesale market.
The Swett & Crawford deal is the latest in a line of acquisitions by Cooper Gay in recent years. The firm bought the aerospace, reinsurance and UK wholesale divisions of Heath Lambert in May 2008 and specialist reinsurance broker Reinsurance.com.ar in October 2009.
Cooper Gay’s operating profit before depreciation, amortisation and impairment for the year ended 31 December 2009 was £19.9m, up from £18.4m in 2008. Fees and commissions for 2009 were £100.5m, up 29% on 2008’s £77.9m.