ROAD incident specialist FMG has been sold to Redde for £43.2m, just months after the completion of an MBO.
Leeds entrepreneur Andrew Cope, who joined the Huddersfield company as executive chairman in April 2014, said it is a “truly exciting day in the long history of FMG”.
It has been a busy time for the group, with Mr Cope leading an MBO backed by Leeds private equity house Endless in December which completed in April following regulatory approval.
The completion of the deal generated an approach from accident management group Redde, which already partly operates in the same sector as FMG under its subsidiary Total Accident Management. Redde will pay £38.2m in cash and issue shares worth £5.0m.
The FMG management team, led by Mr Cope, will be reinvesting a significant part of their equity proceeds as part of the transaction and will remain on board to help drive the business under Redde’s ownership.
Mr Cope, who led five buyouts in 10 years at Zenith, and will continue at FMG as a non-executive director, said: “We strongly believe that marrying FMG’s people, knowledge and innovative capacity to Redde’s long term investment and commitment to the vehicle claims industry will result in an outstanding service and technical proposition for our customers today, tomorrow and well into the future.”
Redde, a Bath-based company which is listed on the stock market, has annual revenues of £230m and employs around 1,600 people, while FMG will add revenues of around £90m and 290 staff. FMG expects it will more than double its EBITDA in the year to September 2015, from £2.5m to £5.4m.
It was the final investment from Endless’s £220m Fund III and becomes the second exit from that fund, which closed in April, following the sale of Bathstore in June 2014.
The speed of this deal was unplanned, with Endless and FMG founder Nick Brown realising their investments “much earlier than expected”.
“We did not expect to be engaging with strategic buyers of FMG for quite some time yet, but we could not ignore the approach of the Redde board or the recommendation of the management shareholders to accept the offer,” said Mathew Deering, partner at Endless.
“At the same time, this delivers a strong return to our investors. While we regret we will not get to work with the FMG team for longer, we know they are going to an excellent home and wish FMG and Redde every success in future as a combined business.”
The shareholders of FMG were advised by a team from Deloitte, led by senior partner Martin Jenkins and including David Frith and Jeremy Thomas, alongside Squire Patton Boggs, led by Jonathan Jones and Hannah Kendrick and KPMG, led by Steve Heath.
The deal, signed yesterday, will require regulatory approvals before completion.
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