Broker forms acquisition vehicle with venture capital company
Yorkshire-based broker Smart & Cook Group has been backed into a newly-formed vehicle that will provide it with millions of pounds to spend on acquisitions.
Smart & Cook founder and chairman Geoff Cook will become chairman of the as-yet unnamed Newco. Cook will also be the major shareholder in the company.
In a statement, the company said the deal had a transaction value of £57m. But it declined to reveal the exact size of its acquisition fund.
Leading venture capital company 3i, which specialises in financial services, has bought into the business, and will have a large minority shareholding.
In preparation for the restructuring, Smart & Cook acquired Royal & Sun-Alliance's 17.5% stake in the business last October.
Cook said: "3i's investment in Smart & Cook helps create a much stronger business, enabling us to acquire strategic assets and to grow into the leading national broker in the UK."
Managing director of Smart & Cook, Paul Meehan, will become Newco's group managing director.
3i has appointed independent director Adrian Burn to the board of Newco as a non-executive director.
Meehan said the group plans to continue its strategy of acquiring smaller commercial lines brokers, but is also looking to bring in other large, independent regional brokers, with a view to floating Newco in three to five years.
"What this enables these large independents to do is get some money out, resolve succession issues and become part of a larger group," Meehan said.