Broker in takover talks with London market brokers as purchases boost brokerage by a third.
Cooper Gay has confirmed that it may float the business following the purchase of several divisions of Heath Lambert.
Group chief executive Toby Esser said that listing the company would be a logical step when it grew big enough.
Analysts estimated that in order to float Cooper Gay would have to reach earnings before tax of £25m – an increase of over 60% on its 2007 figure of £15.3m.
Esser said: “If you’re not selling out, the next logical step is a listing. The long-term goal is to grow the brand. We wish to run ourselves as a public listed company, so the transition would be smooth. But there is a considerable way to go in terms of acquisitions before we consider a float.”
Esser said the company was in serious discussions with two London market brokers. “Anyone who is available – we’re probably talking to them,” he said, adding that he expected to conclude one of the deals by the end of the year.
The news comes after Cooper Gay increased its London market brokerage by a third (£8.5m) with the purchase of Heath Lambert’s aerospace and reinsurance businesses as well as wholesale broking arm, FSJ, which has a brokerage of £3.5m. The broker also bought the professional risks and property and casualty teams from Heath’s Global Business Solutions unit.
On Monday, 70 Heath staff transferred to Cooper Gay under a protection of employment (TUPE) agreement.
Esser would not comment on the price paid for the business, but said that the purchase was based on an initial payment as well as an earn out arrangement. The price is understood to equate to between £6m and £7m.
Esser said: “We’ve bought the front house and the brokerage. Though aspects of the business were loss-making, we believe the deal will be highly profitable for us.”
Cooper Gay has also concluded a refinancing with bankers RBS and Barclays to better service its debt. Esser said that the banks had agreed to release further funds for acquisitions if required.
Portuguese corporation Sonae bought a 14% stake in the business last year, which will rise to 28% by the end of next year.
Esser also confirmed that Cooper Gay was in discussions with a number of insurers over developing MGAs. It bought US MGA specialist Creechurch last year.
“FSJ is a little bit of an MGA – and will become more of one,” he added.
