Today's Viewpoint: A MarshBerry Publication

February 2024 UK M&A Market Update: Demand for Financial Services in the UK and Europe Continues

High demand in a highly fragmented European financial services market continues to drive deals and valuations. 

When it comes to the question of pricing and valuation in the context of mergers and acquisitions (M&A) – it ultimately comes back to what a buyer is willing to pay. The major factor behind this robust pricing of privately held financial services businesses is the lack of supply versus the increased demand. It also helps that there are large amounts of private equity (PE) supplied capital being used to consolidate sections of the UK market. 

For the continental European financial services sector, there is still heavy fragmentation and plenty of supply for acquirers to target. And given its size, that consolidation process is still at least ten years behind the United States and the United Kingdom.  

But there is also tremendous demand, as US and UK consolidators (amongst others) are seeking new territories to feed their continuing acquisition appetite. Highly sought after assets (which can act as consolidation hubs) are transacting at levels at least as high as those seen in the US/UK. The steady rise in valuations that has taken place in the UK over the last ten years has probably taken only two to three years in continental Europe. 

By providing a stream of new M&A targets to justify PE’s continuing desire to put more capital to work in the sector, continental Europe is opening up and supporting the pricing in the UK vs. (what might be assumed) a weakening in demand. 

This trend is currently most marked in the insurance distribution sector, but no doubt will be an increasing feature of the (even more fragmented) investment sector, as it tends to follow a similar pattern over time. 

Insurance M&A market update 

The shortest month of the year was another active one for UK insurance distribution M&A, continuing the strong start to the year, with 12 new announced transactions in February, bringing the year-to-date (YTD) total to 21 (vs. 24 deals at this time in 2023). This count includes a number of very small deals (four involved targets employing fewer than five members of staff) but also several mid-sized transactions, and one increasingly rare new direct investment by private equity into the sector. 

Transactions in commercial lines: 

  • Jensten Group announced its first deal of 2024 with a deal for Melville Burbage, a community broker based in Berkshire.  
  • J.M. Glendinning (via its Astute Insurance Solutions subsidiary) added property specialist Sandhouse Insurance
  • Benefact Group announced a deal for charities specialist Access Insurance in South Croydon. 
  • Brown & Brown (Europe) via Green Insurance Group announced a deal for Oxlea Investments, trading as Stewart & Partners and based in Kent. 
  • Peter Cullum’s Broker Investment Group made a minority (49%) investment into Jenkinson Insurance and related business Penk Insurance, based in Rotheram and Chesterfield, respectively. 
  • Partners& announced two new deals in the Midlands, adding Church Side Insurance Services and Monaco Insurance Services
  • Prestige Insurance in Northern Ireland announced a deal for Find Insurance NI, a broker based in Derry.  

Transactions in personal lines: 

  • Clear Group added high-net-worth broker Porticus Insurance Consultants in London. 
  • The AA announced a deal for key cover insurance business Keycare
  • Voyager Insurance acquired specialist travel insurance broker Navigator Travel Insurance
  • PE investor LDC announced a “significant investment” into insurtech Uinsure, a technology-led broker based in Manchester. 

Investment M&A market update 

Following an active January, dealmaking declined during February, primarily due to fewer transactions in the wealth management subsector, with the deals announced largely involving private equity firms. Transactions included:  

  • Charlesbank Capital Partners acquired CPBE’s stake in Perspective.  
  • Cabot Square-backed MKC Wealth acquired London-based financial planning firm Wealth for Women.  
  • Nucleus announced the acquisition of Grafton Capital-backed white-label platform provider Third Financial. 
  • Inflexion-backed Ocorian announced its acquisition of financial services regulatory consultancy Bovill. 
  • Palatine-backed BK Plus acquired northern accounting firm Abrams Ashton.  

The most notable transactions in the wealth management subsector were:  

  • Waverton and London & Capital merged to create a combined business with £17bn of client assets. 
  • Towergate Health and Protection announced its acquisition of Glasgow-based employee benefits and PMI adviser Solutions Healthcare.  

Transactions in the investment management subsector were:  

  • Virgin Money announced it would buy abrdn’s 50% stake in their joint venture Virgin Money Investments.  
  • Vontobel announced it would acquire London-based private infrastructure manager Ancala Partners.  
  • Amundi acquired Zurich-based private markets specialist Alpha Associates adding €8.5bn in assets.  

We remain resolutely focused on providing our clients with access to the fullest range of options, ensuring the best fit – and typically the best price – if and when they come to sell. Talking about these issues is always valuable, whether you plan to sell now, or in the years to come. 

For those seeking a more comprehensive analysis of UK M&A in the sector, as well as a detailed market sizing and structure analysis, MarshBerry will very shortly be publishing its annual Insurance Distribution Market Report – UK for 2023. Entitled “Demand and Supply”, this year’s report runs to more than 80 pages and again provides a definitive guide to recent sector M&A in the UK. 

*IMAS Corporate Finance LLP has been acquired by MarshBerry.

Contact Olly Laughton-Scott
If you have questions about Today's ViewPoint, or would like to learn more about how MarshBerry can help your firm determine its path forward, please email or call Olly Laughton-Scott, Managing Director, at +44 (0)20 7444 4392.
Contact Fred Hansson
If you have questions about Today's ViewPoint, or would like to learn more about how MarshBerry can help your firm determine its path forward, please email or call Fred Hansson, Managing Director, at +44 (0)20 7444 4393.

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