PIB confirms debt refinance plan to complete more acquisitions

PIB is planning a debt refinance in the next couple of weeks, as it looks to complete more acquisitions.

Having this week confirmed its 19^th acquisition in Irish MGA Optis, the consolidator’s chief financial officer, Ryan Brown, told Insurance Times that PIB has another three UK-based intermediary acquisitions in due diligence.

With the financial backing of private equity house Carlyle, the deals are not reliant on a refinancing. But Brown explained that after a period of sustained growth, the time was right.

He said: “Where we are at the moment we are at a natural point where we have outgrown our existing banks and the debt facilities we’re in.

“We’re a very different size and scale today to what we looked like 18 months ago when we first put the facility in place, so we’re conscious we can put in place a bigger and more flexible facility that supports the growth ambitions we have.”

PIB is working closely with Carlyle as its sponsor to refinance its existing facilities. Deloitte carrying out the due diligence.

Brown said he hoped to have the refinancing finalised within a few months.

Sale

With confirmation of the debt refinancing plan, first reported in Insurance Insider, Brown also poured cold water on rumours Carlyle would look to sell the broker this year.

“It’s certainly not on the agenda at the moment,” he said. “This refinancing is about raising funds to buy more businesses, which Carlyle wants to participate in.

“There’s enough activity going on in the market with our peers, and we’re really only three years into our journey with Carlyle.

“Given we were a start-up, we’ve still got a lot of growing to do and there are a lot of things we want to achieve with Carlyle support before we get to the point where they’ll look to make a return on their investment.”

Brexit

With the Optis acquisition, the group’s first outside the UK, PIB now has a GWP of £571m.

Brown said the deal was primarily motivated by the growth potential of the business as well as the two vendors joining the group, who he said were “exceptional” and would “bring a huge amount to the group.”

But he admitted, with uncertainty persisting around the Brexit outcome, it was an added benefit that the business is situated within the EU.

He explained that the group has a “fair amount” of Euro-denominated business, including through its support of Irish retail brokers accessing the London market via Citynet.

“Having an Irish regulated platform, which can give us an option in the event of whatever happens with Brexit, it’s obviously helpful,” he said.

He said the acquisition gave PIB more options over how to handle the business post-Brexit, but that ultimately the actions taken depend entirely on the final Brexit outcome.

“It all depends on what happens with Brexit,” he reiterated. “We have our own Brexit plan in place for dealing with business coming out of Europe, and there are a number of different options which make up that plan.

“Which option gets triggered will ultimately depend on what happens.”

Europe

But as PIB looks to continue growing, Brown said the group would target more non-UK based firms moving forward.

“We still think there is a lot to do in the UK, but our ambition is to create a business which is going to be around for a long time,” he said.

“So a strategy purely focussed on the UK clearly has a more limited growth potential.”

While saying no non-UK deals were imminent, he said the broker was eying opportunities in Europe.

Brown added: “We will continue looking for opportunities, but we’ll take our time about it.

“It will be about finding the right platform and the right team from which we can look at more opportunities across Europe.”