Run-off specialist Tawa is looking for further acquisitions after its listing on AIM
General insurance run-off consolidator Tawa became the first company of its type to list in the UK with its admission to AIM today.
The company is looking to use to the float to continue it strategy of acquiring solvent non-life run-off businesses outside the Lloyd’s market. It has already bought CX Re, formerly CNA Re, in 2002 and KX Re in 2007.
Tawa has its eyes on the estimated $400bn global non-life run-off market. Its main focus is the UK market, but it is also looking at the US and Bermuda as well as Australia and emerging markets such as Asia.
Through the share placing its has raised £20m, which will provide approximately £7.2m of additional working capital after expenses and the partial repayment of a bridging loan to its main investor.
Taking into account money in the bank, it will have approximately £12.5m of working capital to drive its acquisition programme.
The company says its acquisition pipeline is already “hot” with discussions underway over portfolios ranging in size from $500m to $1bn.
Tawa’s chief executive, Gilles Erulin, says he would be “disappointed” if another acquisition was not done within two years.
Erulin says one of the key reasons for a public listing is to provide additional “acquisition currency” in that a vendor can be offered shares in Tawa in addition to cash for its book of business.
Tawa claims its business model, which involves an aggressive approach to settling claims, is proving successful having unlocked $98m of equity from its run-offs at the end of 2006 against an investment of only $25m.
