MBO backer says "several million pound" warchest available

High street broker Bennetts UK, which was formed after a management buyout (MBO) of the assets of Bennetts GB, is on the acquisition trail.

Bennetts GB was put into receivership in November last year by its backer, Royal Bank Private Equity (RBPE), a division of the Royal Bank of Scotland.

The management buy-out was led by chief executive Ian Darbyshire and chief financial officer John Langley, and backed by venture capitalist Advantage Capital, which is the majority shareholder in Bennetts UK.

The MBO saw the goodwill and assets of Bennetts GB, but not the liabilities, transfer to Bennetts UK.

Advantage Capital director Martin Bodenham said "several millions of pounds" were available to Bennetts UK for acquisitions over the next two to three years, but the amount spent would depend on the type of brokers the company bought.

He said that Bennetts UK would have the capacity to buy either several small owner-operator brokerages, or a few sizable, multi-site businesses, and that it was currently in negotiations with several brokers.

Bennetts UK is predominantly a personal lines broker, which operates from 30 high-street branches in the South and South-West and has annual gross premium income of about £40m.

Bodenham said that it would target other personal lines brokers based in the South and South West for acquisition, particularly those which could provide it with geographic infill in that region.

Bodenham said that prior to being put into receivership, Bennetts GB had recorded heavy losses.

A new management team, led by Darbyshire and Langley, was appointed by RBPE in 2001 and had returned the business to profit, but RBPE was unwilling to inject the capital required to grow the business.