Towergate outlines its plans post-Blanc

Towergate put a brave face on deputy chief Amanda Blanc’s surprise departure this week, outlining plans to press ahead with a refinancing in the first quarter of next year and a float by the end of 2013.

Group chief executive Andy Homer told Insurance Times the consolidator would return to the corporate bond market early next year to raise £665m to refinance the business. It is being advised by JP Morgan and Credit Suisse. An attempt to raise bonds this summer was abandoned after problems in the bond markets.

He said: “Amanda Blanc’s departure makes no difference to the execution of the refinancing in the first quarter of next year and an IPO within three years.”

In reference to management succession at the group following Blanc’s departure, he said: “[Underwriting chief executive] Clive Nathan and [Paymentshield chief executive] Tim Johnson are both very happy chaps at the moment and I guess I will just have to make them work even harder.”

He dismissed suggestions that Blanc’s departure was prompted by a lack of faith in the consolidator model, attributing it to her ambition. He admitted surprise at her departure, but said: “She has never held a chief executive role in a major corporate. If Andy Haste were to leave RSA tomorrow, I am certain her name would be on the list.”

While the terms of Blanc’s gardening leave had not yet been finalised, he said, he looked forward to the two businesses continuing to work together.

Towergate moved quickly following Blanc’s departure to AXA, announced last week. On Monday, it told staff the retail broking arm would now report to retail chief Jon Walker, who will be promoted to the group board. Nathan will take over compliance and Johnson will head the network division. Powerplace will report into board member Max Carruthers. Blanc will not be directly replaced. Further management developments can be expected next year, as the broker puts its succession plans in place and prepares for an IPO.

The company will also return to the acquisition trail. Homer said a successful refinancing would yield a war chest of £100m. Towergate will

be going after smaller brokers next year, rather than a transformational deal – though Homer would not rule out buying parts of other consolidators, including Bluefin if it came to market.

To avoid conflicts with its sister business, small broker consolidator CCV, a joint merger and acquisition committee will be established next year, probably chaired by Homer. This will be seen as a step towards the two businesses integrating prior to flotation.

In a separate development, Barbon has restructured its management, following a swoop for Towergate's director of underwriting operations, Mark Armitage.

Armitage has become Barbon's chief operating officer, while Nick Sharp, currently managing director of its property and commercial division, is the new group managing director. Sharp will lead on acquisition strategy and insurer relations.