Executive vice president says move helps position Brown and Brown ’for continued growth’

American broker Brown and Brown has entered into an agreement to acquire Kentro Capital and its subsidiaries as it looks to strengthen its position in the UK.

London-based Kentro is an insurance group that manages more than £500m of gross written premium and has 350 insurance professionals operating from offices in the UK, US, Europe, Asia and Dubai.

A statement announcing the deal yesterday (22 May 2023) said the purchase of Kentro was expected to close in the fourth quarter of 2023.

It came after Brown and Brown acquired Global Risk Partners (GRP) in July 2022 as it looked to establish itself as a major force in the UK retail insurance market.

Speaking to Insurance Times earlier this year (13 April 2023), Stephen Ross, head of M&A at GRP, said that with Brown and Brown’s backing, GRP can continue to grow “at a very strong pace”.

Chris Walker, executive vice president of Brown and Brown, said acquiring Kentro helps “strengthen our presence with London markets and positions us for continued growth”.

He added: ”The cultural alignment between our businesses demonstrates our shared vision and commitment to assisting customers of all sizes to meet their unique risk management needs.”

’Extremely exciting’

Kentro’s companies include Nexus, Xenia, Millstream, Capstone Brokers and Spectrum Risk Management.

Nexus underwrites across a portfolio of 20 risk classes, including trade credit, financial lines and aviation, while Xenia is a retail trade credit broker with over 1,500 policyholders ranging from large corporates to SME customers.

Meanwhile, Millstream operates as a specialty travel and personal accident provider, Capstone Brokers provides access to the Asian marketplace for financial lines and digital asset risks and Spectrum Risk Management offers intermediary, agency and advisory services.

As part of the deal, Kentro and its individual business entities will continue to trade and operate with the same leadership team, brand and market focus.

It means Kentro chief executive Colin Thompson will continue to lead the group, supported by chief financial officer Stuart Rouse.

Speaking about joining Brown and Brown, Thompson said: “We are at an extremely exciting time in our continued growth and development as a group and coming together with Brown and Brown will serve as an enabler and a catalyst for further sustained success.”

Walker added: “We are very excited to have Colin, the Kentro senior leaders and their talented staff join the Brown and Brown team.”

Stake sale

As part of the deal, private equity investor BP Marsh revealed in its own statement today (23 May 2023) that it would sell its stake in Kentro.

The firm currently has investments in 16 companies, including ATC Insurance Solutions, Criterion Underwriting and Verve Risk Services.

BP Marsh originally invested in Kentro in August 2014, with an initial equity investment of £1.5m for a 5% shareholding.

This rose to 18.7% after it invested another £13.6m – BP Marsh said it expected to receive £51.5m upon selling its stake.

Dan Topping, the company’s nominee director on the board of Kentro, will resign from his role on completion of the sale.

He said: “It has been a pleasure to work with Colin Thompson and the whole team at Kentro over the past nine years and to see the business grow and flourish.

“The partnership with Brown and Brown offers an exciting future for them and we wish everyone at Kentro every success.

“This investment and sale exemplifies our ability to identify niche opportunities and to back successful management teams and to successfully realise value for our shareholders.”

Thompson added that Kentro had been “incredibly privileged to have partnered with BP Marsh over the last nine years”.