Capita Insurance Services, part of The Capita Group Plc (“Capita”), announced today that it is to acquire BDML Connect Ltd from the insurance group BDML.
Subject to final Financial Services Authority approval, Capita Insurance Services will acquire BDML Connect for an initial cash consideration of £26 million and deferred consideration of up to £9 million, dependent on future business performance over the 30 months to December 31, 2007. The consideration will be satisfied from existing resources.
BDML Connect delivers personal lines insurance products on behalf of major affinity brands such as Norwich Union, Admiral Insurance and RAC. Its policies provide cover motor, household, personal accident and travel insurance.
Included in the acquisition is Thornside, a business division within BDML Connect, which is an intermediary specialising in pet insurance sales and administration for major brands in the pet insurance market including Argos and Homebase. It was recently appointed to handle pet insurance for HBOS.
BDML Insurance Solutions, a newly formed subsidiary company of BDML Connect specializing in niche distribution channels and product lines, is also included. This business will focus on the insurance opportunities in the local authority and travel/leisure sectors as well as to support the home Computer initiative in the U.K.
BDML Connect Ltd’s audited accounts, including Thornside, for the 12 months to December 31, 2004 report an operating profit before tax of £2.2m on turnover of £11.9m. Net assets on transfer will be approximately £2.9m.
The acquisition of these operations adds to Capita’s current insurance capabilities and enhances Capita’s proposition to the affinity market to which it can now provide end-to-end sales and service, policy management and claims handling. It will also enable Capita to provide distribution opportunities for underwriters through BDML.
BDML Connect’s 430 staff will transfer to Capita and will continue to work from their existing Portsmouth location. Sandy Dunn, Chairman and CEO of BDML Connect, and his existing senior management team will move to Capita and remain with the business.
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