Cobra Holdings, parent of Cobra Insurance Brokers and Cobra Network, is set to float on Aim and raise £10m for acquisition activity.
Cobra will float on 29 June and two days later is expected to announce an acquisition adding £25m to its £350m premium income.
Steve Burrows, Cobra’s chief executive also revealed to Insurance Times that the company recently acquired two brokers, now called Cobra Tubbs Batten, worth £9m in premium income.
“In fact over the next few months we aim to add a total of £46m premium income,” Burrows said.
The estimated market capitalisation for the group is £45m and Cobra is currently undertaking roadshows to woo investors.
Burrows said it was targeting institutional investors and hedge funds.
Insurance Times has also learned that some investors approached currently have an interest in rival listed broker, Broker Network.
“The main reason for floating is acquisition,” Burrows said. “We are looking to buy around eight brokers a year. And we hope to make £25m in premium income each year. We are looking to increase our consolidation powers and one way is going to market to gain investment.”
Burrows explained that by floating on Aim, Cobra will be able to acquire bigger brokers because of the ability to offer both cash and shares.
Burrows said: “There’s more cash in the system to continue acquisitions.”
Some 67% of the company will remain in control of the shareholders while 33% will float on Aim, the so-called ‘junior’ stock exchange.
Thirteen individuals within Cobra’s management are the main shareholders in Cobra Holdings. They have each put up to 15% of their shareholding for trading.
Meanwhile Cobra Underwriting Agencies is installing agencyPlus, a purchasing system provided by Insurecom. Burrows said that Cobra was first testing the system at its underwriting agency before rolling it out to other business divisions.
“We know Insurecom very well. For the last five years one of our directors has sat on Insurecom’s worldwide board,” Burrows added.
Burrows also revealed that by the end of 2008 he hoped that Cobra Underwriting Agencies would make £18m premium income, mainly derived from businesses which bring in up to £5,000 premium income.