Country Mutual identifies UK targets, but insists there is no pot of cash
After a year on the sidelines, Country Mutual Insurance Brokers (CMIB) is back on the acquisition trail.
Managing director Neil McKenzie said that, after declaring a moratorium on acquisitions in 2002 while it sorted out IT, cultural and business model issues, CMIB is now actively looking for brokers to buy. "We're only recently back on the acquisition trail," he said.
CMIB, the UK's 38th largest broker with fee and commission income of £15.9m, is interested in acquiring brokers that transact around 80% of their business in commercial lines. In terms of size, McKenzie said most of its potential targets would have premium income of about £7.5m and brokerage of £1m.
McKenzie said Scotland was the primary geographic target for future acquisitions. "We would like to extend our thumbprint which is very much Midlands and Southern-based," he said. Northern Ireland, North-eastern England, South Wales and South-eastern England (excluding London) are also priority areas.
McKenzie said that while CMIB is owned and funded by insurer NFU Mutual, it does not have unlimited access to an acquisition fund. "We don't have a pot full of cash, what we have is access to capital subject to a sound business case," he said. "We will pay what we think is a reasonable price and nothing more than that."
McKenzie said CMIB was hoping to make at least one major acquisition this year and complete two others early next year. Sources said Worcestershire-based Clarke Roxburgh, which has fee and commission income of about £8m, is one of the brokers CMIB is talking to, a claim McKenzie denied. "I have absolutely no knowledge of whether Clarke Roxburgh is up for sale or not. We are not in discussions." Clarke Roxburgh managing director Michael Hayward was not available for comment when Insurance Times went to press.