Consolidator finds new finance for its buy and build strategy
Global Risk Partners has obtained £200m of additional funding for acquisitions in pursuit of its target to reach £1bn gross written premium.
The consolidator said that investment fund Ares Capital Europe has provided significant new funding in association with the group’s banker, HSBC.
“Our partnership with Ares gives GRP access to significant new capital which will be deployed to execute our ambitious growth strategy,” said chief executive David Margrett (pictured).
The £200m funding is in addition to GRP’s equity capital, which is provided by private equity investor Penta Capital, chairman Peter Cullum and GRP management.
Speaking about acquisition prospects, Margrett told Insurance Times that GRPs pipeline is “quite strong”, and that he expects the pace of acquisition to accelerate.
“We expect to see another active year in 2018,” he said.
Margrett said GRP’s current GWP is £550m, up from £400m a year ago.
“We walk away from more deals than we do,” he said, adding however that GRP will reach its £1bn GWP target “If we did only 50% of our pipeline. With the right deals, anything is possible.”
The announcement of new capital came as GRP reported its year to March financial results, which showed revenues of £41.2m, up from £17.1m a year earlier. The group reported a pretax loss of £11.5m, against a prior year loss of £7.0m. It said this resulted from the accounting treatment of its financing costs, amortisation of goodwill and acquisition costs during the period.
“We have brought some quality businesses into GRP and delivered strong organic growth, reflected by our excellent results this year,” said chairman Peter Cullum.
“The Ares funding illustrates great confidence in GRP’s highly experienced management by making capital available to accelerate the current strategy.”
Margrett pointed to how active GRP has been in mergers and acquisitions in the current year.
“This has been a transformational year for GRP, following twelve acquisitions since March,” he said
“We have plenty of firepower for more deals after securing a £200m facility from Ares Capital Europe and HSBC, and our very strong pipeline means we remain on track to reach our £1bn GWP target.“
Margrett said the new finance will help it continue its buy and build strategy and the market should “fully expect more of the same from GRP next year, on our way to becoming a £1bn GWP business.”
Turning to GRP’s London Market and MGA platforms, Margrett said Lonmar and Ropner continued to show strong growth, both organically and through targeted recruitment.
GRP’s MGA segment continued to deliver a strong performance in 2017, with EBITDA more than doubling year on year.
“Each of the businesses continues to grow in their respective marketplaces, based upon a service led proposition and providing specialist products to their broker panel and customer base.”
Margrett added: “We retain our appetite to grow our MGA division through acquisition and recruitment, with our preferred targets having strong management teams, a specialist product range and robust underwriting performance.
|Business type||Date of acquisition|
European Property Underwriting
City of London Underwriting
Synergy Insurance Services
Ropner Insurance Services
Lonmar Global Risks
UK Retail Brokers
Abbey Bond Lovis
Courtenay Insurance Services
Collidge & Partners
Colin Fear Insurance Services
Insurance Services West End
ECS Insurance Brokers Ltd
Alan & Thomas
Commercial and General
Anglo-Hibernian Insurance Services Ltd