The general insurance and healthcare arm of Towry Law has been sold to Broker Network Holdings and a consortium of the Towry Law Insurance Brokers (TLIB) management team for £12.5m.
Contracts have been exchanged, subject to approval from the Financial Services Authority (FSA), with the deal set to add £50m of gross written premiums and six new offices to Broker Network, for the sum of £12.5m made up of cash resources and bank debt, making it the largest acquisition by Broker Network so far.
The sale of TLIB, follows the takeover of Towry Law at the beginning of May in a £37m deal by JS&P to form the new IFA firm, Towry Law JS&P Group. It says the sale was necessary as the general insurance and healthcare business of Towry Law no longer “has a natural fit with our core business of wealth management”.
As a result of the management buyout, it says it can now concentrate on its core business of offering independent financial and wealth management advice to both corporate and private clients.
Andrew Fisher, chairman and chief executive of Towry Law JS&P Group, says the firm is moving towards being totally fee based, which he sees as being fundamental to giving independent, appropriate and intelligent wealth management advice.
But he adds: “Fee based advice is however less relevant to the general insurance market. I am really please we have been able to find our successful insurance business an acquirer which has such a strong strategic fit for their business.”
Following the sale TLIB, which will have net assets of £1.5m at the completion of the deal, will be renamed and join Broker Network as a full member, with the Broker Network holding a majority share and the remainder owned by senior employees of TLIB.
It is planned for it to operate as a separate subsidiary of Broker Network, under the direction of the current managing director, Martin Wright, who says he welcomes the sale and is delighted to see TLIB join Broker Network.
He says the sale will allow TLIB to have the autonomy to develop its general insurance and healthcare business in partnership with Broker Network, while at the same time preserving a continuing relationship with Towry Law to look after and develop its mutual clients.
He adds: “We have had a consistently successful and profitable business for 40 years and this development will enable us to continue to provide high levels of service to our clients and a secure future for all our staff.”
Grant Ellis, chief executive officer of Broker Network, says the acquisition of the general insurance business of Towry Law represents a strong step forward in the development of the Broker Network business, and it is delighted to welcome such a well-regarded and high-achieving team to the company.
He adds: “We expect to drive a significant improvement in the acquisition’s profitability. We will integrate it into our successful network infrastructure and are confident it will be earnings enhancing for shareholders. The purchase increases our gross written premium by some 12% to almost £400m, further reinforcing the company’s strong position in the UK commercial insurance market.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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