Thompson Heath & Bond gets acquisition cash.
Lloyd’s broker THB Group is set to receive a £7.5m investment, which it will spend on acquisitions and on reducing its bank debt.
The broker’s directors have accepted an approach from three private investors.
The cash will be used to acquire teams and businesses as well to pay down existing bank borrowing. THB plans to strengthen the technical and distribution capabilities in its London broking operation and core overseas markets.
Frank Murphy, chief executive of THB, said: “Three investors approached us and wanted to get involved with the business. They haven’t insisted on a position on the board.
“In the current financial climate, it’s a big vote of confidence for the management of THB.”
In a statement to the London Stock Exchange, the company said the investors would subscribe to 2.75 million new ordinary shares at 70p per share.
This represented a premium of 14% on the Lloyd’s broker’s closing mid-market price last Wednesday.
Investors have also subscribed to £5.6m of new convertible preference shares.
The deal is subject to shareholder approval at a general meeting scheduled for later this month.
Murphy added: “Having made our purchase of PWS in January, it will enable us to take that forward in our global expansion by supplementing our existing teams in London.
“We’ve just been given a licence in Brazil and we’ve got offices in Singapore and Dubai, which are good platforms for the future.”
THB Group also announced this week that the financial authorities in Brazil have formally authorised the application for its wholly owned subsidiary, PWS Brasil Corretora de Resseguros, to operate as a reinsurance broker in the Brazilian market.
THB acquired PWS Brazil as part of its purchase of some of the overseas assets of reinsurance broking specialist PWS in January this year.
THB said raising additional capital was vital to achieving the maximum benefit from its acquisition of PWS..