Agency looks to expand US operations.
Beazley Group has acquired Momentum Underwriting Management Limited, a specialist personal accident and life underwriting management agency based in London with an office in Australia.
Whilst MUM will continue as an agency, Beazley’s share of the business will be underwritten by two new Lloyd’s syndicates. In addition, Beazley will be supporting MUM in its plans to establish local operations in the United States, further expanding Beazley’s presence and underwriting reach in the US.
The total consideration payable in relation to the transaction is up to $37.5 million, representing £20.6 million at current exchange rates, subject to a pound-for-pound adjustment to the extent that net assets at completion differ from £2.4 million.
The consideration, which will be satisfied through Beazley’s own internal cash resources, comprises an upfront cash payment of $15 million (£8.2 million) payable upon completion, subject to the net asset adjustment, and further deferred payments of up to $22.5 million (£12.4 million) payable in instalments between 2012 and 2014. The amount of the deferred consideration is subject to the profitability of the business during the 2009, 2010 and 2011 years of account. For the financial year ended 31 December 2007, MUM reported audited consolidated profit before tax of £0.5 million and gross assets of £2.6 million.
The transaction is subject to the approval of Lloyd’s and the Financial Services Authority.
Andrew Horton, chief executive of Beazley, said: ““This acquisition reflects our ambition to continue to develop our specialist expertise in sophisticated underwriting markets and represents a strong strategic fit. It provides an excellent opportunity for Beazley to access new business that complements our existing portfolio.”
Chris Branch, chairman and managing director of MUM, said, “We look forward to working with Beazley to enhance and develop our current product offering. This exciting development provides an excellent platform for future growth.”
