Network’s AIM listing raises only £1m, but acquisitions continue with £7m partner loan
Broker network Cobra Holdings raised a tenth of the amount it was expecting from its listing on the stock market.
Cobra planned to raise £10m from its £1-a-share AIM listing at the end of June, but pulled in less than £1m, which was slashed to £200,000 after the costs of the stock market venture were paid.
The stock was eventually listed at 97p and just over one million shares were issued on top of the 36 million already held by the directors.
The initial plan was to float one third of the company, giving it a market capitalisation of £46m. The flotation valued the company at just £36m.
It has now borrowed £7m from its corporate partners and a leading insurer to fund acquisitions.
A spokeswoman said the group had scaled down its AIM listing plans deliberately to enable future acquisitions to use a mix of cash and shares.
It said the £7m loan facility was already available. It refused to say who the insurer and corporate partners were.
On 20 July, Cobra chief executive Steve Burrows sold a further 9,803 of his nine million shares at £1.02 per share.
The share price as Insurance Times went to press was £1.02. Burrows was not available for comment.
Meanwhile, Cobra Holdings has acquired Cobra network member Tubbs Insurance Services. Tubbs is a commercial broker based in West Byfleet, Surrey, that controls about £4.5m of gross written premium (GWP).
The acquisition of Tubbs was in negotiation prior to Cobra’s admission to AIM. It will be integrated with an earlier acquisition, KW Batten (Insurance Consultants).
KW Batten, was also a Cobra Network member, with a Farnham operation controlling nearly £2m GWP.
Cobra said the acquisitions form part of its ‘hub and spoke’ strategy which establishes regional brokers, linked to smaller independent firms within their catchment area.
The smaller firms will be either integrated into the hub or managed remotely as satellite offices or spokes.