October ‘blocked out’ for discussions with investors as asset prices fall, says Brightside chief
Brightside Group has outlined ambitions to buy struggling consolidator Jelf, as it looks to raise money for acquisitions.
The broking group, which includes Group Direct, Commercial Vehicle Direct and Panacea Finance, is speaking to private equity houses and other potential backers as it prepares an expansion bid.
Last month, Brightside posted strong results in the face of the recession, with profit before tax up 28% to £3.2m for the first half of 2009. The group, which insurance director Arron Banks described as a “dark horse” in broking, has no structural debt.
Banks confirmed that it would be interested in buying Jelf if the opportunity arose. Insurance Times revealed last week that backer 3i was reviewing its stake in the consolidator, and a sale was one of several options.
“Jelf is a good example of what happens to a consolidator when the music stops,” Banks said. “It won’t be able to buy anything anymore, and it will be split up or bought outright. It would be a near perfect match for us.”
Banks said there had been discussions, but there were no formal sale talks. He said Brightside was looking at several acquisition opportunities, and was ready to take advantage of falling prices.
He said: “October is blocked out for seeing investors. We are quite different to some of the other groups floating around, because we focused on building our business organically when assets were very expensive. Now, the pendulum is swinging the other way.”
If Brightside acquired Jelf, it would probably divest the healthcare business. Jelf is thought to prefer other options to an outright sale, however. These could include an insurer taking a stake or 3i holding onto its 28% until the market improves.
Brightside chief executive Paul Chase-Gardner said the group was looking at options, and hinted that de-listing from the AIM was a possibility.