Towergate Insurance has agreed to sell its majority interest in
Broker Network to Highbridge Principal Strategies. The purchase price is reported to be up to £46m.
North Yorkshire-based Broker Network, a group of regional independent insurance brokers, has around 120 staff. Towergate has said that it would use the proceeds to beef up its investment programme. The deal would also provide Broker Network with improved capabilities for growth.
Highbridge Principal Strategies has been the majority owner of Towergate since February 2015, following a turbulent period for the insurer. In November 2014, Towergate revealed it had fully drawn its revolving credit facility, creating doubts among bond holders that it was no longer a going concern.
Over a year ago, Towergate received an offer from its creditors which led to an infusion of £375m capital into the firm, also reducing its net debt by 60%.
The 2015 results for Towergate revealed an adjusted EBITDA was £79m, compared with around £93.2m for 2014.
Towergate CEO David Ross commented, “This is a very solid performance. Income remained robust at £353m, which is testament to the deeply rooted knowledge and experience of our employees as trusted advisers in the communities we serve.
“We are investing over £14m to upgrade our IT infrastructure, part of a wider investment initiative in the business that will drive significant improvements in our back and front office.”
Meanwhile, Broker Network CEO Andy Fairchild said, “The investment is a game-changer for the Company and will transform our business by providing us with the resources and capabilities needed to further strengthen our position as the driving force in independent broking.”
