Many in the broking sector are already looking to their future ownership

The UK broking market is set to witness a round of merger and acquisitions as their private equity and venture capital owners look to realise their investments.

Speaking to underwriters and brokers in London, Tom Barford, associate director at accountancy firm BDO said while the recent publicity surrounding the potential deal that would have seen Aon to acquire rival Willis Towers Watson masked the fact many in the broking sector are already looking to their future ownership.

“In the UK, 38% of the top 50 brokers by revenue are owned by private equity,” explained Barford. “Of that number 40% were acquired in 2014 or prior and a further 21% were acquired in 2015.

“It means that given the traditional four to five-year investment window for private equity companies, 61% of those firms will be looking to exit in 2019 and 2020.”


The past month has seen deals on both sides of the Atlantic, with private equity firm Aquiline Capital Partners is acquiring US broker Relation Insurance Services from PE firms Parthenon Capital and Century Equity Partners.

In the UK, March saw Adler Insurance Group announce it was set to acquire the general insurance assets of Coventry-based chartered broker Corrigans. While the cost of the deal has not been revealed, it is expected to get regulatory approval in the second quarter of the year and will be Adler’s fourth acquisition since 2015.

Brunel Insurance Brokers revealed it has acquired Glentworth Insurance Services for an undisclosed sum.

Glentworth, which was originally established in 1993 under the name of Watson Insurance Agencies, operates from four offices in the South West. Over the years the client base has grown substantially with a significant bias towards commercial customers. It said the business commands approximately £10m in gross written premium and has established strong insurer relationships.

Trade sale

Speaking before the Adler and Brunel announcements, Barford said that recent broker sales had seen positive multiples being achieved and PE firms will be looking at how best to manage an exit. Some owners may look to larger PE firms as potential buyers or may even look to acquire brokers of a similar or small size in an effort to grow the scale and revenues of the firm in the expectation that it will deliver better returns as a more attractive potential acquisition.

However, the hope of many will be to negotiate a trade sale.

“Everything points to the number of investors looking to exit in the next two years increasing,” said Barford.

However, if the number of brokers looking for new ownership becomes a drag on the ability to deliver the multiples which meet the expectations of the private equity investors, firms may well look at new ways in which to recover their investment.

“There has been a rise in interest around the benefits that could be delivered via an IPO,” he added. “The ability to reduce their involvement in the company and realise a value on their equity and investment may well see private equity firms consider the option to take the firm to the market.”