Fresh capital to fuel growth of broking business and Pioneer MGA
Private equity house Capital Z has agreed to invest $50.7m (£30.1m) and take a minority stake in broking group BMS.
The money will support the growth of BMS’s broking division as well as its underwriting agency Pioneer.
The investment follows a review by BMS’s management to determine its approach to broking and underwriting opportunities across the market.
As part of the review, the broker investigated the potential for third-party investment to fuel its growth.
Under the deal, Capital Z will buy preference shares and warrants that entitle it to a minority stake in BMS’s share capital.
On completion, Capital Z managing partner and co-founder Robert Spass will join BMS’s board.
BMS chairman Christopher Hopton said: “This investment is a highly significant event for the group.
“I am particularly pleased to welcome Bob Spass to our board. His experience in our industry is extraordinary and his participation, together with the involvement of Capital Z, places the group in an exceptionally strong position to accelerate our growth and command further market share.”
Spass said: “I have been impressed with the strength and depth of the management team at BMS, their vision and their opportunities to generate significant growth. Capital Z is pleased to have reached this agreement, which makes us strategically and economically part of the group’s future success and I look forward to working with the team.”
BMS chief executive Dane Douetil added: “Over the last three years we have invested in 18 new teams across the group and our continued successful growth is underpinned by Capital Z’s investment, which I consider to be pivotal in our development. We have been absolutely determined to maintain the owner/manager ethos of the group while finding a partner who can bring in-depth knowledge of the industry, which will be helpful in our growth. In Capital Z we have found that partner.”
BMS was advised on the investment by investment bank Canaccord Genuity.