Herdman says split was ‘amicable’, but would still get tough on poaching
Oval has agreed to sell two businesses it acquired back to the original vendors.
Managing director Jeff Herdman told Insurance Times that the agreement – with Steve Manning of Wilkinson Rodgers in Huddersfield and Andy Tett of Tett Hamilton in Cleveden – was “amicable”. Both businesses are SME focused.
Herdman said: “In a buy-and-build business like ours, sometimes it doesn’t suit certain individuals, and we have to accept that. And if that individual is professional about it, we can come to an amicable arrangement where we can agree to sell parts of his former business back to him at equitable rates – then both sides are happy.
“Both acted in a very professional and sensible manner and came to an agreement very quickly to avoid unnecessary speculation for both clients and staff. This is how it should be done, in an adult way.”
Herdman warned that if any vendors left Oval and attacked their business without first reaching a deal, the consolidator would maintain its former hardline stance. “When this happens, we will use all our strength and all the legal clout that is available to us to defend our position,” he said.
In March 2008, Oval was awarded a substantial sum following successful court proceedings against Berkeley Burke, after four former Oval employees joined the rival broker.
Herdman said he did not expect any further buybacks, adding: “Over six years and 33 acquisitions, we have built up a very unified and integrated business. These are isolated instances and we part as good friends – we will even continue to wholesale some business with them.
“We are very happy with what everyone else is telling us; all the other proprietors are very happy with our integration.”
Herdman refused to comment on the prices Manning and Tett were paying, saying only that negotiations were ongoing and would be at “equitable rates”. He added that Oval would plough the cash back into acquisitions.
Tett said he had no regrets about selling to Oval in the first place, and that the buyback would be largely funded by the original vendors. He said: “We all went into it with the best intentions, but sometimes things just don't work out. It's all very amicable.”
Manning declined to comment.
In November, Oval chief executive Philip Hodson revealed plans to acquire 12 further businesses before a public flotation, slated for some time before May 2012.