As 2011 kicks off, brokers are talking big on acquisition plans. But after years of consolidation, what’s left to buy? Here’s a look at five businesses that would be on every chief exec’s wish list – whether they’re selling or not

The Christmas season is well and truly over and the festive decorations are down. While it’s easy to see why the January blues might be kicking in for some, things are looking up in the broker world.

As the soft market grinds on, acquisitions appear to be back on the agenda. A glut of brokers with war chests are eyeing up purchases for the year ahead.

So which brokers will be at the top of the shopping list for acquisition-hungry buyers in 2011? All targets fiercely maintain their independence, but that doesn’t stop them being coveted by bigger predators. Insurance Times takes a look at five potential acquisitions.

As for the buyers, they are led by Towergate, its coffers likely to be boosted by £100m of private equity money. Following closely behind will be Giles, keen as ever for a transformative deal. Both consolidators aim to grow substantially before flotation in two or three years’ time.

The usual suspects – CVC, Bluefin, Henderson and Jelf – will be on the hunt, along with smaller players such as Somerset-based Higos and Barnett & Barnett. New buyers such as Heath Lambert and AJ?Gallagher will also be on the prowl. Oval and Barbon – among the potential targets highlighted here – are themselves potential buyers too. And let’s not forget the megabrokers, Marsh, Willis and Aon, which have the firepower for a massive deal.

As the wish list below demonstrates, 2011 could be a very interesting year.


Oval is the dream catch for rival consolidators Giles and Towergate. Snaring the Yorkshire-based consolidator would be especially sweet for Giles, easily giving the merged business the scale to attract investors upon initial public offering. A tie-up would add diversification to Giles or Towergate, which are both strong in the SME sector. Oval is also successful at attracting large corporate clients, normally the stomping ground of megabrokers Aon and Marsh.

Oval’s £43.2m debt would not hamper a takeover, as it is at an acceptable range of roughly 2.5 times greater than earnings. In 2008, rumours were swirling that Oval was up for grabs, but only at a hefty £300m price tag. In today’s market, the consolidator probably wouldn’t fetch half that figure, which explains its eagerness to hold out until flotation, potentially in 2015.

One barrier to a deal is that chief executive Phillip Hodson (right) – who last month scooped Insurance Times’s Broker Chief Execs’ Chief Exec Award – and managing director Jeff Herdman would probably want the top jobs in any merger.

Despite these potential stumbling blocks, Oval remains an attractive prospect for acquirers. Hodson mooted a merger with Heath Lambert at the end of last year, a move that would give scale for its listing. At present, Oval remains the most likely consolidator to be involved in a deal.


The demise three years ago of Erinaceous, the self-styled one-stop property shop, is a distant memory. Administrators saved its insurance subsidiary from the axe and since then the rebranded Barbon has gone from strength to strength to become a high-quality property broker.

Under charismatic chief executive Martin Oliver, the group – which has its own war chest for acquisitions – has created a stable financial platform.

Majority owned by Caley (a bank consortium of HBOS, HSBC and Lloyds TSB), Barbon’s EBITDA improved 20% in 2009 to £13.5m compared with £11.2m in 2008.

Potential bidders would be the consolidators but it would also make a good fit for an insurer aiming to increase its distribution channels in property. Zurich has such an arrangement through its ownership of student property specialist Endsleigh.

Autonet Insurance Services

The Insurance Times Awards presentation was a proud moment for managing director Glynn Keeling, as he picked up the Personal Lines Broker of the Year award. It was a just reward for cracking the online distribution market with Autonet Insurance Services.

Autonet is sure to be coveted by bigger beasts, having shown healthy profits and turnover since its formation 11 years ago. The van specialist increased its gross written premium by 39% to £50m in 2009, despite tough market conditions, and pre-tax profits jumped from £1.3m to £2m in the same period. The firm has provided its insurer partners with good loss ratios.

Autonet is small enough to be a target for larger brokers such as Brightside, which is also an online vehicle distributor, as well as one of the consolidators looking to break into the online market. The company, which also offers SME products online, would be a good fit for Giles, and provide the consolidator with a growth story that may excite investors at its initial public offering.

In November, Autonet launched on, where it expects 40,000 quotes a month within the first year. A possible barrier to a deal is that Keeling is keen for the business to remain independent, targeting £100m GWP by 2012.


The Lloyd’s broker has quietly gone under the radar, sneaking in between the megabrokers to pull in clients on the back of its service proposition. Turnover increased 14% last year on the back of major contract wins and new lines of business. Miller, run by chief executive Graham Clarke, last year also recruited a team of around 38 former Aon Benfield staff to fuel its growth plans.

Miller would be a good fit for Cooper Gay, which also brokers in wholesale and reinsurance, as it would add scale to Cooper Gay’s planned flotation in 2013.

The megabrokers might also be interested, as 2011 is likely to see a lingering soft market, making organic growth difficult and acquisitions the best way to boost revenues. A good offer for the firm might tempt some of Miller’s older share-owning staff.

But the very act of its being taken over by a larger firm might take the shine of Miller’s burgeoning reputation as an independent service-led broker. A buyer would have to negotiate Miller’s employee share ownership structure, which would mean providing incentives for staff to stay on after their shares have been paid off, while also attracting new employees.

Jardine Lloyd Thompson

The battle for scale between Marsh and Aon has been rumbling on for years. JLT is the ideal purchase to help either side in their annual race for the number one spot. JLT has strong leadership in chief executive Dominic Burke, good-quality staff – many of them recruited from the megabrokers – and a client base that is satisfied it is getting the attention it deserves.

The Stock Exchange-listed company has performed well despite the weak economy. Fees and commissions increased 21% to £375.6m in the first half of 2010 from £309.7m in last year’s first half.

Those kinds of figures mean JLT is small enough to digest but large enough to make a difference to one of the megabrokers. Indeed, sensing a takeover, investors snapped up JLT shares last year. The City slickers ignored Burke’s strong rebuttals of takeover rumours to help boost the company’s share price from 483p to 632p in just one year.

Although Aon or Marsh would love to get their hands on the firm, JLT’s largest shareholder, Hong Kong-based conglomerate Jardine Matheson, remains unconvinced about selling up its 30% stake, preferring to keep hold of the healthy annual dividend. But if the price is right, anything is possible. This is one purchase story that’s unlikely to disappear. IT