British Columbia Investment Management Corp. and Preservation Capital Partners are considering a sale of BMS Group that could value the insurance broker at more than £600 million ($720 million), people familiar with the matter said.
The investment firms are partnered with Evercore Inc. to evaluate strategic options for the company, the people said, asking not to be named because the matter is private.
BMS generates approximately £100 million [$120 million] in annual revenue, according to the people. Financing for a deal piques the interest of both banks and private debtors, they said.
Deliberations are ongoing and it is not certain they will result in a sale, the people said. A Preservation Capital representative declined to comment, while spokespersons for BCI, BMS and Evercore were unavailable for comment.
London-based BMS helps companies looking to buy a range of specialist insurance and reinsurance products, according to its website. BCI and Preservation Capital invested in BMS worth £500 million in 2019 [$600 million].
Insurance brokers are attractive targets for private equity firms, as they do not need to maintain large regulatory capital buffers. The fragmented nature of the industry also allows for expansion through acquisitions. The companies are often sold between buyout firms, with valuations sometimes based on aggressive assumptions about future earnings.
Earlier in November, KKR & Co. agreed to acquire French insurance broker April from CVC Capital Partners in a €2.3 billion ($2.4 billion) deal.
Preservation Capital is led by founder and managing partner Jatender Aujla, a former Warburg Pincus dealmaker. The company typically makes equity investments of £50m to £150m. BCI is one of Canada’s largest institutional investors.
–With assistance from Dinesh Nair.
Photo: The Shard skyscraper on the skyline behind homes in London, UK, on Tuesday February 1, 2022. Photo credit: Chris J. Ratcliffe/Bloomberg
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