Yorkshire future for Broker Network after takeover
INSURANCE group Broker Network says it is staying committed to Yorkshire following its £95m takeover by rival Towergate Partnership.
The company will go ahead with plans to move to a new headquarters on the St James retail park in Knaresborough next September from its current base in Harrogate.
Broker Network chief executive Grant Ellis, who will become chairman of Towergate's Network Division following the takeover, was born in Knaresborough.
The 605p-a-share offer announced yesterday is worth 15.8% more than Harrogate-based Broker Network's closing share price on Monday and 27.6 per cent more than the 474p the shares were on October 11, the day before Broker Network announced that it had received a takeover approach.
Broker Network shares rose 67.5p or 13% to 590p on the announcement.
Broker Network acts as an umbrella network for small insurance brokers. Its model is to buy up independent insurance brokers owned by people looking to retire. Once bought, overheads can be cut and profits increased.
The company, which listed on the Alternative Investment Market (AIM) in May 2004 with shares priced at 71p which valued the company at £11m, employs more than 350 people and, following its latest acquisition last month, has 169 members and annual premium income of around £450m.
Towergate is the UK's largest independently owned insurance intermediary, offering around 200 specialist insurance products and employing more than 3,400 people in 100 offices.
Since its foundation in 1997, the Towergate Group has completed more than 130 acquisitions and now controls gross written premium of £1.1bn a year.
In the year to December 31, 2006 Towergate achieved revenues of £238m and earnings before interest, tax and amortisation of £95m
Towergate said it has received irrevocable undertakings in respect of 8.5 million Broker Network shares, representing about 55.2% of the existing issued share capital of Broker Network.
Mr Ellis said: “'The Broker Network board feels that the offer made by Towergate is in the best interests of the Broker Network shareholders and indeed in the best interests of the Broker Network business, its network members and its people too. Towergate is a major presence in the UK insurance market and joining forces with them presents Broker Network and its members with further opportunities to expand and prosper, which I'm very excited about.”
Peter Cullum, the executive chairman of Towergate, said: “We are delighted to announce this transaction. This is a deal that makes great sense for employees, brokers and customers alike of Broker Network – our two organisations complement each other perfectly. I have known Grant Ellis for many years and I know we both share the same passion for promoting the role and value of a broker. We also share the same enthusiasm for how Broker Network could flourish under our ownership and continue to be run as a first class business for its broker members. Grant Ellis's proposed position as the chairman of the Network Division of Towergate demonstrates our commitment to offering the leading UK network proposition.”
