Lloyd's broker to pay over £5m for acquisition to strengthen its UK business
Lloyd's broker Besso is believed to be close to acquiring Lloyd's broker CBC UK for over £5m.
Market sources said the deal had been agreed and was expected to complete early next week.
Besso is a wholesale broker that specialises in international business, with around 65% of its business believed to come from the North American market, and less than 5% from the UK.
It is understood to be interested in CBC UK in order to strengthen its presence in the UK.
Sources said that CBC UK will continue to trade under its existing name and current managing director Peter Hicks will continue to run its operations.
CBC UK specialises in professional indemnity, directors' and officers', commercial property and liability, and motor fleet business.
In the year to 31 December 2002, it recorded turnover of £5.5m for an after tax profit of £139,000, down 49% on £275,000 in 2001. The acquisition price is understood to be one times brokerage, which one source described as "extremely low".
"The performance of CBC UK has been waning year on year, hence the low value," the source said.
Besso was bought out of Jardine Lloyd Thompson through a management buyout in 1995. In 2002, Besso's holding company, Besso Holdings, made a profit before tax of £4.4m on turnover of £18.8m. It ranked 30th in this year's Insurance Times Top 50 Brokers.
Besso executive chairman Colin Bird declined to comment and Hicks was not available for comment when Insurance Times went to press.