Helios Underwriting acquires Lloyd’s limited liability member at 16% discount

AIM-listed investment firm Helios Underwriting has acquired Catbang 926 Limited, a limited liability member of Lloyd’s of London, for a £5.6m cash payment.

Helios will pay £2m on completion of the deal, with the remainder to be paid within 60 days of this date. Syndicate capacity equating to a £1.3m market value has also been included within the acquisition.

Catbang currently participates in a spread of Lloyd’s syndicates that broadly matches Helios’s existing portfolio, which is centred on property insurance and reinsurance. The agreed transaction will enable Helio’s to continue building its involvement with syndicates within this remit.

The purchase also aligns with Helios’s wider strategy of increasing its underwriting capacity through acquisitions; moving forward, the firm will continue to pursue a number of additional Lloyd’s limited liability vehicles (LLV) for this purpose.

Business goals

Catbang’s 2019 underwriting capacity is £4.1m – this is projected to be £4.7m for 2020. In the year ending 31 December 2018, the firm made a £0.2m profit before tax on gross written premium (GWP) of £3.6m.

An independent valuation of the business, conducted by Humphrey’s, calculated that Catbang was worth £6.7m – the consideration therefore represents a 16% discount and is approximately £0.6m below the fair value of assets being acquired.

Helios will reinsure 70% of the 2020 underwriting year in line with its policy of reducing on-risk exposures.