B.P. Marsh & Partners PLC Disposal (2746T)

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RNS Number : 2746T

B.P. Marsh & Partners PLC

04 January 2017

   Date:                            4 January 2017 
   On behalf of:                 B.P. Marsh & Partners Plc ("B.P. Marsh" and the "Company") 

For immediate release

B.P. Marsh & Partners Plc

Disposal of Investment in Besso

21 year investment in Besso culminates in exit

B.P. Marsh & Partners Plc (AIM: BPM), the specialist venture capital investor in early stage financial services businesses, announces that it has reached agreement to sell its entire 37.94% shareholding in Besso Insurance Group Limited ("Besso") for cash.

BGC Partners Inc. ("BGC") has agreed to acquire 100% of Besso, with ongoing management and employees rolling over a proportion of their existing Besso shareholdings into BGC shares. The transaction places an entire enterprise valuation of Besso at GBP70.5m, however the final purchase price will be subject to various adjustments by reference to completion accounts, which the Company currently anticipates to be as at 31(st) March 2017.

In order to put this into context, the same adjustments applied to Besso's 31(st) August 2016 Balance Sheet would result in estimated proceeds to B.P. Marsh of GBP20.6m net of transaction costs and pre-tax. This equity stake was most recently valued by B.P. Marsh at GBP20.1m as at 31(st) July 2016. Completion of the transaction will be subject, inter alia, to FCA approval being granted and as part of the terms of the transaction Daniel Topping, the Company's Chief Investment Officer, will resign as a Non-Executive Director on the Boards of Besso and Besso ESOP Trustee Limited.

Besso commenced a strategic review in August 2015, engaging Canaccord Genuity to assess its strategic options. During this time B.P. Marsh has seen its valuation of Besso increase significantly and the Company's gross proceeds from this sale will represent an increase of c. 48% on its published valuation of the same stake in Besso at 31(st) July 2015 of GBP13.9m.

In the year to 31(st) December 2015, Besso achieved Revenues of GBP37.6m (an increase of 16% on 2014) and EBITDA of GBP4.17m (an increase of 15% on 2014), and it is continuing this trend in 2016, where it is on track to achieve EBITDA in excess of GBP10m.

In addition to the sale proceeds, B.P. Marsh's existing shareholder loans of c. GBP1.36m will be repaid in full upon completion. In the 2017/18 financial year the Company was forecasting an overall income yield of 0.64% on its Besso stake, and the Board is confident that this will be easily replaced and exceeded as a result of reinvestment of the proceeds of this sale.

Consequently, following completion of the transaction and subject to adjustments at completion, B.P. Marsh expects to have additional funds available of approximately GBP18.37m (after transaction costs and tax). All of the above calculations are based on the August balance sheet, and therefore are subject to change. The Board of B.P. Marsh intends to continue to strike a balance between utilising funds for investment for long-term capital growth, whilst providing shareholders with a meaningful ongoing return.

Investment funds will be targeted to both the existing portfolio to enable those businesses to develop further and to pursue new opportunities. The current pipeline of new opportunities includes start-up and early stage, as well as more developed, businesses particularly within the insurance intermediary sector both in the UK and internationally. B.P. Marsh has expanded geographically in recent years and now holds investments in Australia, South Africa and Singapore as well as throughout the UK. The international strategy remains the same; to focus on territories with good opportunity for business development in partnership with a London investor and a suitably developed regulatory and compliance environment.

B.P. Marsh's investment and exit from Besso demonstrates the success of its strategy of investing for the long-term and working with management teams to achieve a mutually desirable exit at the optimum time. B.P. Marsh was instrumental in establishing Besso in 1995, funding a buy out from what is now the Jardine Lloyd Thompson Group, with an initial equity investment of GBP0.46m and further equity investment (net of redemptions) of GBP2.37m over the subsequent 21 years. Since the initial investment, B.P. Marsh has supported Besso's growth through a longstanding partnership and provision of working capital finance, including spearheading the buy-out of Wells Fargo in 2011 and international expansion with the opening of offices in Turkey and Brazil. B.P. Marsh will continue its joint venture alongside Besso with its investment in Sterling Insurance (PTY) Limited which will be unaffected by this transaction.

Commenting, Brian Marsh OBE, B.P. Marsh's Executive Chairman, said:

"Our investment in Besso typifies our approach - long-term, collaborative and focused on delivering highly attractive results for all stakeholders. We have stuck with Besso through many ups and downs over the course of two decades, as we believe our investments to be a true partnership with the management team or individual we back. However, our partners at Besso have now reached the stage in the development of their group for which they need financial firepower which outstrips the resources that B.P. Marsh is able to supply. Consequently, we are pleased that Besso has identified BGC as its future ongoing partner and we wish them well."

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

For further information:

B.P. Marsh & Partners Plc www.bpmarsh.co.uk

Brian Marsh OBE [phone]

Nominated Adviser & Broker

Panmure Gordon

   Atholl Tweedie / Adam James / Charles Leigh-Pemberton                       [phone] 

Financial PR

Redleaf Communications [e-mail]

Emma Kane / David Ison [phone]

Notes to Editors:

About B.P. Marsh & Partners Plc

B.P. Marsh's current portfolio contains twelve companies. More detailed descriptions of the portfolio can be found at www.bpmarsh.co.uk.

Since formation over 25 years ago, the Company has assembled a management team with considerable experience both in the financial services sector and in managing private equity investments. Many of the directors have worked with each other in previous roles, and all have worked with each other for at least five years.

Prior to Brian Marsh's involvement in the Company, he spent many years in insurance broking and underwriting in Lloyd's as well as the London and overseas market. He has over 30 years' experience in building, buying and selling financial services businesses, particularly in the insurance sector.

Alice Foulk joined B.P. Marsh in September 2011 having started her career at a leading Life Assurance company. In 2014 she took over as Executive Assistant to the Chairman, running the Chairman's Office and established herself as a central part of the management team.

In February 2015 she was appointed as a Director of B.P. Marsh and a member of the Investment Committee. In January 2016 Alice was appointed Managing Director of B.P. Marsh.

In her position as Managing Director, Alice is responsible for the overall performance of the Company and monitoring the Company's overall progress towards achieving the objectives and goals of the Company, as set by the Board.

Dan Topping is the Chief Investment Officer of B.P. Marsh, having been appointed as a Director in 2011. He joined the Company in February 2007, following two years at an independent London accountancy practice. Dan is the Senior Executive with overall responsibility for the portfolio and investment strategy of B.P. Marsh.

Dan graduated from the University of Durham in 2005 and is a member of the Securities and Investment Institute and the Institute of Chartered Secretaries and Administrators.

Dan is a standing member of the B.P. Marsh Investment and Valuation Committees and currently serves as a Board Director across the portfolio.

Camilla Kenyon was appointed as Head of Investor Relations at B.P. Marsh in February 2009, having four years' prior experience with the Company. She was appointed to the main board in 2011. Camilla is Chair of the New Business Committee evaluating new investment opportunities. She has a number of nominee directorships over two investee companies and is a standing member of the Investment Committee. She is a Member of the Investor Relations Society.

Jonathan Newman is a Chartered Management Accountant and is the Group Director of Finance and has over 20 years' experience in the financial services industry. Jon graduated from the University of Sheffield with an honours degree in Business Studies and joined the Group in November 1999, following two years at Euler Trade Indemnity and two years at a Chartered Accountants. Jon is a Member of the Chartered Global Management Accountants, the Chartered Management Accountants and the Chartered Institute of Securities and Investment.

Jon was appointed a Director of B.P. Marsh & Company Limited in September 2001, and Group Finance Director in December 2003 and was instrumental in the admission of the Group to AIM in February 2006. Jon is a member of the B.P. Marsh Investment and Valuation Committees and currently serves as a Board Director for Walsingham Motor Insurance Limited, and provides senior financial support and advice to all companies within the Group's portfolio as well as evaluating new investment opportunities.

- Ends -

This information is provided by RNS

The company news service from the London Stock Exchange

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January 04, 2017 02:00 ET (07:00 GMT)