Towergate about to enter exclusivity period to buy NPIB
Mergers and acquisitions in the UK broking space continued apace this week with both Towergate and Ryan Specialty Group (RSG) targeting two heavyweight brokers.
Towergate may have to pay between £8m and £12m to acquire Norwich & Peterborough Insurance Brokers (NPIB), on current market valuations calculated by Insurance Times.
It has entered an exclusivity period with NPIB’s owner, the Yorkshire Building Society. A deal is likely to be concluded next month.
Accounts posted last week showed NPIB was in good health. Turnover increased to £5m in 2011 (2010: £451, 998), and pre-tax profits rose to £1.76m (2010: £1.65m). Shareholders’ funds stand at £7.7m (2010: £6.4m).
A Yorkshire Building Society spokesman said: “The heads of agreement have been signed. Due diligence will be carried out [soon].”
The building society bought NPIB when it merged with Norwich & Peterborough Building Society on 1 November 2011.
RSG’s acquisition of Direct Group is a milestone”
Pat Ryan, RSG
Yorkshire Building Society put NPIB for sale in February 2012, as part of a review of the business.
Meanwhile, RSG’s deal for insurance services provider Direct Group could cost about £40m.
Direct Group was one of six new entrants in Insurance Times’s Top 50 Brokers last month, ranking 42nd, with a brokerage of £18.9m and an EBITDA of £6.2m for the year to January 2012.
The acquisition will offer RSG a complementary fit with its Lloyd’s managing agent Jubilee, which it acquired last year, particularly its third-party administration and MGA offerings.
RSG founder and chairman Pat Ryan (pictured above) said: “RSG’s acquisition of Direct Group represents an important milestone in the development of our company and Jubilee and furthers RSG’s expansion into the global community.”
Private equity firm LDC owns a significant stake in Direct Group after backing a £40m management buy-out of the company in August 2007.
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