Oval has confirmed that it is in discussions with Allianz about taking a stake in the broker group.
Managing director Jeff Herdman said that the company hoped to make an announcement regarding Allianz’s stake – believed to be 10% – in the next few weeks.
He would not comment on speculation that Norwich Union was also interested in taking a stake in the company. But he maintained that Allianz’s involvement would have no bearing on the company’s independence.
The broker group also announced two more acquisitions, Devon-based Griffin Commercial and Hart Owens in Sheffield. Oval’s brokerage now stands in excess of £70m.
Herdman said the company was looking to increase its revenues to £110m by the end of next year – an estimate he described as conservative.
The acquisition of Griffin provides Oval with a strong foothold in Devon, while Hart Owens, with annual premiums of over £7m, is the second Sheffield broker to come under Oval’s umbrella.
Herdman said the company was in discussions with “a good number” of brokers, and was expecting to make at least three more acquisitions over the next three to four months.
He said it was unlikely that these would be in either Scotland or Newcastle, where Oval has long desired to increase its influence.
He dismissed claims that the credit crunch had impacted on the company’s ability to secure additional funding for acquisitions.
He said: “We are well within our spending levels. We increased our facility to over £65m before the credit crunch set in.”
Oval secured a war chest of £53m with Barclays and Lloyds TSB in March last year. Private equity firm Caledonia Investments owns a diluted stake of 40% in the company.
For the year ended 31 May 2007, Oval’s general insurance business reported a 27% growth in brokerage from £47m to £60m.
Oval now controls over £250m of GWP – an increase of 39% year on year.
The group’s pre-tax profits – including those of its financial services division – increased by 6.5% to £4m, while earnings before interest, tax, deprecia-tion and amortisation, and before one-off costs, increased by 19% to £11.7m.
