Consolidator has a number of concerns, paving way for Gallagher deal
Insurance Times understands that Towergate viewed the price for Giles as too high for a business that could face a number of difficulties in the event of an acquisition, such as staff defections and the subsequent loss of revenue.
Private equity owner Charterhouse was seeking £250m for the business, although Gallagher, led by chief executive David Ross (pictured), is yet to reveal how much it is willing to pay for Giles.
Giles’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) last year were £24.7m.
Giles shareholder deficit
According to Giles’s accounts at Companies House – registered under the name Expectrum Limited – the balance sheet shows a shareholder deficit growing to £147m last year, compared with £107m in 2011.
Historically, Gallagher has paid anywhere between six and eight times earnings.
If Gallagher were to base its price on previous acquisitions, top dollar for the Giles business would be about £200m.
Gallagher has signed an exclusivity agreement to acquire Giles, but Towergate is still understood to be interested if Gallagher pulls out and the price comes down.
No comments yet