Meanwhile, RK Harrison moves for Mercury West as broker acquisitions continue
Acquisitions by independent brokers continued this week as Aston Scott snapped up part of the client book of the insolvent Francis Townsend & Hayward (Insurance Brokers).
Francis Townsend & Hayward (Insurance Brokers) officially went into administration last month after losing £337,360 in the year to April 2011 and £275,512 the year before.
Aston Scott has a brokerage of around £14.5m after a series of acquisitions over the last decade.
The company, which has offices in Padstow, Bramley, West Malling, Sheerness, Cambridge, Cheam and Glasgow, brokers commercial and specialist products.
Chief executive and shareholder Andrew Scott stressed there was still some good business held by Francis Townsend and he believed it would boost gross written premium in the coming year.
Scott is looking forward to the end of the month when his firm completes a deal to buy Cobra’s broking operations in Caterham and Alton for a total of £8.2m.
Despite the consolidators eyeing the business for a takeover, Scott is keen to keep the firm as an independent broker.
Last week, RK Harrison moved to buy high net worth broker Mercury West. Mercury West has two offices, in Liverpool and Hatfield, and 15 staff placing £6m gross written premium business each year. The acquisition will extend RK Harrison’s presence in high net worth.
While Aston Scott and RK Harrison remain keen on purchases, others are less enthusiastic.
Oval operations director Jeff Herdman said the consolidator was cautious of fresh acquisitions because of the high prices being demanded.
Herdman said: “We’re definitely looking for acquisitions, but not at the moment because the market is not conducive to sensible discussions. People have unrealistic expectations about the value of their businesses.”
Pass notes: Broker buyers
Apart from the consolidators, what other firms are interested in acquiring brokers?
Former Brokerbility chief executive Stuart Randall is looking to buy business from retiring brokers and has been talking to 75 firms. This month, Invicta managing director Steve Gamage completed his tenth acquisition - Fountain Insurance Services & Investment Services - for an undisclosed fee.
Why aren’t some consolidators buying more brokers?
Oval and Bluefin believe some potential acquisitions are priced too high. They say the market must move on from the pre-credit crunch sky-high prices.