Chief executive to focus on new business model after CCV acquires broking arm for £4m.
Welsh broker Culver will look to develop its business model as a specialist broker after selling its retail insurance arm to CCV for £6m.
Culver Insurance Brokers (CIB), a subsidiary of Culver Holdings, will be acquired by Protectagroup Acquisitions, a subsidiary of CCV, for £4m with deferred consideration of up to £2m depending on CIB’s net brokerage in the year following completion.
David Sullivan, chief executive of Culver, told Insurance Times that the broker would now look to focus on other areas of the business.
“I hope this will allow us to develop a business model that works,” he said. “We will look to add value and turn round and do what others have been doing.”
He said the business would now look for acquisitions in new markets.
In a statement to the Stock Exchange, the group said that proceeds from the disposal of the broker would be used to repay short term borrowings of almost £2m.
In the statement, Richard Read, chairman of Culver, said: “This disposal continues our policy of realising value for shareholders when attractive offers are received and where a change of ownership could enhance the growth prospects of a business in a way Culver could not.
Around 30 staff from CIB, which operates from three offices in Cardiff, Bracknell and London, will transfer to CCV.
CCV, headed by Tim Johnson, bought Welsh broker Protectagroup in April this year.
In April, the Welsh broking and financial services group reported a pre-tax loss of £614,000 for the year ended 31 December 2007. It blamed the loss on a delay in completing two key acquisitions and the cost of restructuring the group. The company acquired Lloyd’s broker LPH Pitman and aviation specialist AMS Corporate Risks in February.
However, it reported that its two operating segments were profitable in the year. Insurance broking made a profit before taxation of £383,000 (2006: £267,000) and employee benefits made a profit of £12,000 (2006: £55,000).
CIB made a profit before tax of £52,000 on income of £2.14m compared with £101,000 on income of £2.63m in 2006.