LAS Claims Management acquired in £35m deal
BIRMINGHAM-based insurance business LAS Claims Management has been bought from private equity firm Gresham by The Innovation Group in a deal worth £35m.
LAS – based in TriGate House in Hagley Road, Edgbaston – provides its customers with a outsourced services that handle claims across a range of property-related perils including storm, burst pipes, flood, fire, theft and accidental damage.
The vast majority of LAS’s revenue comes from water-related claims, known in the insurance industry as “wet” perils.
In the financial year ended 31 July 2012, LAS reported £34.3m of revenue (£8.3m net of claims costs), £0.3m loss before tax (after deducting £1.4m of interest relating to shareholder loan notes) and £17.8m of gross assets.
However, since then the business has been restructured and it has secured several significant contract wins.
The Innovation Group, a Hampshire-based global provider of business process services and software solutions to the insurance, fleet, motor and property industries, says the addition of wet perils skills and capabilities to its service portfolio completes a key strategic goal and will increase the UK property division’s addressable property market from a claims spend of £100m – currently available for its traditional subsidence market – to £1.3bn.
The £35m acquisition will be paid cash, inclusive of an element of consideration to be deferred for two years post completion (currently expected to be around £1.2m).
It is to be funded from part of the proceeds of a £65m new issue of The Innovation Group shares which it is now commencing via a placing and open offer.
On completion, Darren Cooper, CEO of LAS, will join The Innovation Group, together with others on the LAS senior management team. LAS will form part of its enlarged UK property division.
Andy Roberts, CEO of The Innovation Group said: “LAS represents an excellent strategic acquisition for the group and for our UK property business in particular. The addition of LAS opens up a significant opportunity to us to broaden our service proposition in the UK property market to cover a wider range of property claim perils.
“Our subsidence division has built up strong market share through its proven track record of significantly reducing claims costs, offering a unique fixed price model in the market and enhancing customer service.
“By adding a “wet” perils capability to our portfolio, run by a team with a similar track record and reputation we will increase our addressable market and provide an excellent opportunity for future cross-selling into our respective customer bases.”
