CBG acquires Barclay Brown

Manchester broker CBG has completed the acquisition of Barclay Brown, a provider of specialist niche insurance products and general insurance broking services.

The highlights, revealed in a statement to the Stock Exchange, are:

* CBG has agreed to pay an initial consideration of £1,450,000 in cash for Barclay Brown.

* Further deferred and additional consideration totalling a maximum £1,850,000 is payable in cash and shares over a two year earn-out period against achievement of targets.

* Barclay Brown’s operational businesses reported profit before tax of £237,619 on turnover of £1,710,275 in the year to 30 September 2007.

* The acquisition consolidates CBG’s position within the North West marketplace.

* CBG will benefit from the enhanced buying power of the consolidated Group.

Barclay Brown has offices in Manchester, Mold, Preston and Waterfoot. The existing Directors of Barclay Brown will remain with the enlarged business. The Directors believe that significant synergies will be generated by the addition of Barclay Brown, both in terms of further development of the niche schemes available, and also through the cross selling opportunities available from the wider CBG service offering.

Barclay Brown Holdings Limited acts only as a holding company, does not prepare group accounts, and accordingly the following unaudited financial information is given for the combined trading subsidiaries for the year ended 30 September 2007. Turnover in the period totalled £1,710,275, with profit before tax of £237,619.

The maximum total consideration payable to the vendors is £3,300,000 comprising initial consideration of £1,450,000, deferred consideration of £1,250,000 and additional consideration of £600,000. This is only payable in full if the designated and agreed targets are met.

The initial consideration of £1,450,000, has been satisfied in cash from the Group’s own cash resources at completion. The deferred consideration of a maximum of £1,250,000 is payable in two tranches of £625,000 in March 2009 and March 2010, subject to Barclay Brown achieving agreed turnover levels in the two years following completion. The additional consideration of a maximum of £600,000, of which the vendors may elect to take up to a maximum of £150,000 in shares, will be payable subject to Barclay Brown achieving defined additional turnover objectives.

Laurie Turnbull, chairman, CBG, said: “The acquisition of Barclay Brown is significant for CBG as it consolidates our strong position within the North West market. This is a further material step change for our business, and the benefits to be derived from consolidating and integrating Barclay Brown will enhance our client service proposition and extend value for our shareholders. Across our office network we will now employ approximately 180 people. The Group remains active with our expansion plans, both organic and acquisition led, and we look forward to the next phase of our development.”