Sale at £11.3m above book value = 30p per share uplift in BPM's NAV per share? ... and that's before the potential deferred consideration of up to £17.8m. |
Considering BPM's market capitalisation is £153.68m its astonishing that it holds 60% of that in cash!
And then there's this!
''The Company will then be entitled to receive deferred consideration of up to GBP17.8m in cash based upon 20% EBITDA growth targets above Paladin's current EBITDA in FY24 and FY25, payable in 2025 and 2026. There is the possibility of further consideration in FY25 should Paladin outperform these growth targets.''
Contribution to BPM's profits £.9m last year. |
 Sale of Paladin Holdings Limited, parent company of CBC UK Limited
B.P. Marsh and Partners Plc (AIM:BPM), the specialist private equity investor in early stage financial services businesses, is pleased to announce the sale of its entire shareholding in Paladin Holdings Limited ("Paladin"), the holding company of CBC UK Limited ("CBC"), subject to certain conditions including regulatory approval being granted.
Highlights:
-- GBP41.8m (net of all transaction costs) initial cash consideration expected to be received from the disposal of the Group's 43.8% holding in Paladin on completion, subject to regulatory approval
-- Internal rate of return to B.P. Marsh of 45% (inclusive of all income and fees) based on initial consideration
-- Repayment to the Group of GBP5.9m outstanding loans to Paladin
-- GBP11.3m uplift from GBP30.53m valuation as at 31 July 2023
-- Potential for GBP17.8m further consideration if Paladin achieves defined hurdles
-- Initial equity investment of GBP3.5k
Sale of Shareholding in Paladin
B.P. Marsh has agreed to sell its shareholding in Paladin, the parent company of CBC, the London-based Insurance Broker, to Specialist Risk Group Limited ("SRG"), one of the fastest growing groups of insurance intermediaries in the UK, subject to regulatory approval. SRG is backed by HGGC, the Californian based mid-market private equity firm.
Background to the Investment
B.P. Marsh originally invested in Paladin as part of a Management Buy-Out in February 2017, with an initial equity investment of GBP3.5k for a 35% shareholding. The Company has also supported Paladin with loan funding during this time, and currently has outstanding debt of GBP5.9m. Since B.P. Marsh's investment, Paladin's EBITDA has grown from a loss of GBP(50)k in 2016 to a forecast adjusted EBITDA of GBP10m in FY23. In the year ended 31 January 2023, Paladin contributed GBP0.9m to the Group's total income from investments.
The Transaction
Upon completion, the Group expects to receive at least GBP41.8m in cash (net of all transaction costs) plus repayment in full of its GBP5.9m loans to Paladin, an aggregate cash receipt of GBP47.7m. The equity proportion of the initial consideration alone represents an GBP11.3m uplift (or 37%) on the Group's most recent GBP30.53m valuation of the investment as at 31 July 2023, underlining our valuation methodology.
As well as the initial consideration on completion, the Company will also be entitled to receive its proportion of any net working capital adjustment, expected to be finalised within three months of completion.
The Company will then be entitled to receive deferred consideration of up to GBP17.8m in cash based upon 20% EBITDA growth targets above Paladin's current EBITDA in FY24 and FY25, payable in 2025 and 2026. There is the possibility of further consideration in FY25 should Paladin outperform these growth targets.
Jon Newman, the Company's Finance Director and Nominee Director on the Boards of Paladin and CBC, will resign from his roles at Paladin and CBC on completion of the sale.
The investment, development and subsequent sale of the Group's holding in Paladin demonstrates B.P. Marsh's established strategy of partnering with entrepreneurial management teams to assist their growth prior to reaching a management-led exit in a time frame that suits all parties.
Jon Newman, the Group's Finance Director, commented:
"The sale of our stake in Paladin at an expected IRR of 45% at completion with the potential for significant further consideration over the next two years, is testament to our investment strategy and ability to identify opportunities to back successful management teams and to successfully realise value for our shareholders. We believe that there are few, if any, UK investors that could have made this investment, demonstrating the specialist position that B.P. Marsh occupies in the marketplace and the opportunities that this can provide our investors.
"It has been an absolute pleasure to work with Andrew Wallas, Rob Cottingham and the whole team at CBC and be a part of the transformational growth since the MBO almost seven years ago. This deal offers an exciting future for both SRG and CBC, and the whole of B.P. Marsh wishes everyone at CBC every success in the future."
Andrew Wallas, Chairman of CBC, said:
"When Rob Cottingham called me in 2016 to explain the opportunity for a Management Buyout of independent Lloyd's Broker CBC, I contacted B.P. Marsh, who agreed to partner with us very readily. This year is the 50th anniversary of me commencing my career within the Lloyd's market as a junior administrator with Nelson Hurst under the tutelage of Brian Marsh. B.P. Marsh has provided follow on funding and supported us to expand the business by attracting highly experienced, talented and dedicated practitioners.
"The B.P. Marsh nominee director on our board, Jon Newman, has provided us with insight, inspiration, wise council and a calming influence which has been invaluable to us as we have developed the business under the leadership of Rob Cottingham. The role and expertise of B.P. Marsh and in particular Jon Newman in helping us to navigate this transaction has been deeply appreciated by both Rob Cottingham and myself."
Use of Proceeds
Subject to completion, this transaction would increase the Group's current funds to approximately GBP93.7m after transaction costs and tax. Following the receipt of the Sales proceeds, the Directors will present their plans for the utilisation of this cash to Shareholders.
Note |
paladin- a fine result, what will they do with the cash? a tax-efficient return to small shareholders. |
plus repayment of loan. |
htTPs://citywire.com/new-model-adviser/news/updated-bp-marsh-expects-at-least-15-9m-from-aspira-sale-to-titan/a2430240?re=114610&refea=252901 |
nor did the IMC presentation. Nothing substantial said about narrowing the NAV discount. Divi is meagre nd the Kentro gain is being dripped out over the next two years. |
The Board of B.P. Marsh intends to continue to strike a balance between utilising sale proceeds for investment for long-term capital growth, whilst providing shareholders with a meaningful ongoing return. The Board continues to discuss its aim to return meaningful levels of capital to shareholders and will provide more information in due course.
1% doesn't sound very meaningful. |
Excellent half year results as we were expecting.
R. |
26% of share price now in cash. |
B.P. Marsh & Partners PLC Completion of Sale of Kentro Capital Limited (4864P)
10/10/2023 7:00am
UK Regulatory (RNS & others)
B.p. Marsh & Partners (LSE:BPM)
Intraday Stock Chart
Tuesday 10 October 2023
Click Here for more B.p. Marsh & Partners Charts.
TIDMBPM
RNS Number : 4864P
B.P. Marsh & Partners PLC
10 October 2023
10 October 2023
B.P. Marsh & Partners Plc
("B.P. Marsh", "the Company" or "the Group")
Completion of Sale of Kentro Capital Limited
Updated Use of Proceeds
B .P. Marsh & Partners Plc (AIM: BPM), the specialist venture capital investor in early stage financial services businesses, reports that, further to its announcement on 23 May 2023, the sale of its 18.38% stake in Kentro Capital Limited ("Kentro") to Brown & Brown, Inc ("Brown & Brown"), has today completed, delivering sale proceeds to us of GBP51,522,000.
Accordingly, the Board intends to declare a special dividend of 2.78p per ordinary share at the time of the Company's Interim Results on 17 October 2023, along with details of the proposed payment date. The Board has also agreed to allocate a further GBP6.0m for dividends over the next three years , payable in the years ending 31 January 2025, 31 January 2026 and 31 January 2027.
Kentro's Founder and Chief Executive Officer, Colin Thompson commented: "During the time that B.P. Marsh invested in Kentro, the business has undergone tremendous growth, culminating in the international success and leading market position of our MGA platform (Nexus). In that same time, we have built a best-in-class specialist broking operation (Xenia) of which we are immensely proud. None of this would have been possible without the support provided by our friends at B.P. Marsh. As we move on to our permanent home with Brown & Brown, we would like to thank B.P. Marsh for partnering with us and wish them all the very best in their future endeavours."
Commenting on this disposal, the Group's Chief Investment Officer, Dan Topping stated:
"We here at B.P. Marsh would like to wish Colin Thompson and the whole team at Kentro all the best for the next chapter in their growth and development, in partnership with Brown & Brown.
It has been a pleasure to work with the whole team at Kentro over the last 9 years and to see the business grow and flourish. This disposal has delivered an Internal Rate of Return of 23.66% (inclusive of all income and fees) and a money multiple on the Equity Investment of 3.41x. It is a further testament to B.P. Marsh's ability to secure niche opportunities, to back successful management teams and to successfully realise value for our shareholders."
Brian Marsh OBE, Chairman of B.P. Marsh, commented: "The GBP51.5m sale of our stake in Kentro demonstrates the Company's ability to partner with young businesses and management teams and help them achieve their ambitious growth plans, whilst delivering strong returns for our shareholders.
"As a result of this disposal, we are pleased to be able to declare a special dividend and to outline further dividends over the next three years. These funds will enable us to make further investments in the portfolio, delivering capital growth, alongside shareholder returns."
Note
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.
For further information:
B.P. Marsh & Partners Plc www.bpmarsh.co.uk
Brian Marsh OBE +44 (0)20 7233 3112
Nominated Adviser & Broker
Panmure Gordon
Atholl Tweedie / Stephen Jones / Amrit
Mahbubani / Ailsa MacMaster +44 (0)20 7886 2500
Financial PR & Investor Relations
Tavistock bpmarsh@tavistock.co.uk
Simon Hudson / Tim Pearson / Katie Hopkins +44 (0)20 7920 3150
Notes to Editors:
B.P. Marsh's current portfolio contains fourteen companies. More detailed descriptions of the portfolio can be found at www.bpmarsh.co.uk .
Since formation over 30 years ago, the Company has assembled a management team with considerable experience both in the financial services sector and in managing pr |
Money in Bank.
Now for ST to comment.
GLA. |
Why has the EPS forecast fallen so much and who forecast the reduction? |
hTTps://citywire.com/new-model-adviser/news/lebc-group-enters-administration-and-sells-assets-to-subsidiary/ |
a bigger buyback program; it has not worked so far....... |
It's alive ! |
Tip in daily mail. Maybe 5% boost tomorrow? |
I would have thought it obvious that the 'ploughing cash back into growth' is not convincing the market to put this on a higher rating to close NAV gap hence the need to pay a decent divi and show its sustainable through sales and recycling the money back into new investments. |
Agreed,the gap between share price and NAV is not going to close with such timid management. |
Diluted NAV now 516p. To return £13m to shareholders (thats 10% mcap).
Pathetic divi. They need to man up and increase the normal divis. |
This is a stunning deal resulting in 40% of the market cap will now be in cash. Surely if investors do not find this attractive, the company could easily go private following the impact of this transaction. |
That's nice, a lot more cash in. Not going to help the buyback, so they could just return some cash or up the divi. |
A rise on next to volume. Wonder how the buyback is going. |
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