Oval confirms £115m refinancing deal

See analysis: Squaring the Oval

Oval has confirmed it has signed an agreement with a group of leading UK banks for an enlarged £115 million senior banking facility to facilitate the next stage of the company's acquisition and expansion programme.

The new facility, revealed yesterday by Insurancetimes.co.uk, was arranged by Barclays and Lloyds TSB and includes substantial commitments from The Royal Bank of Scotland and HSBC.

In a statement, Oval said it will continue to pursue its strategy of organic growth, combined with selective acquisitions of high quality regional broking and financial advisory businesses which fit with its ethos and focus.

"This will enable Oval to build further strength in its insurance broking activities, and also build on its existing presence in employee benefits, healthcare and wealth management. In line with this strategy, in the last month Oval has acquired Powell Insurance Brokers in Liverpool and Williams Insurance Brokers in Wales, further strengthening Oval’s regional presence," it said.

Oval said it has a healthy pipeline of further acquisitions which will add scale and expertise in each of Oval's key segments, although the business will continue to proceed with caution as long as the economic environment remains so uncertain. It said the business is now well placed to grow in line with its stated strategy and to take advantage of any opportunities that the external environment creates.

Phillip Hodson, chief executive of Oval, said: “We are delighted with the new facility agreement and to be working with such a strong group of banks, and remain committed to building a substantial, independent, client focused insurance and financial services business. The new facilities, in addition to the substantial debt and equity funding already secured over recent months, will help us to deliver that vision.”

Tony Cook from Barclays Bank plc said: “Oval have a proven status as a major force in the insurance broking market reflecting the success of their buy and build strategy over the past five years, during which they have integrated more than 30 acquisitions. During this time we have enjoyed an excellent relationship and we were delighted when Oval appointed Barclays and Lloyds TSB to lead a further refinancing to raise additional debt capacity for their next acquisition phase.

“This came at a time when there was significant uncertainty in the debt markets, but the arrangement of this new £115m Medium Term 4-Bank Club Facility is testament to the continuing availability of debt funding to good quality corporates and the ability of the local market to deliver such financial arrangements. Barclays Bank plc, Lloyds TSB, Royal Bank of Scotland and HSBC were the lenders under this facility which was structured and co-ordinated by Barclays Corporate Leveraged Finance and Lloyds TSB Corporate Markets.”