UK specialty managing general agent (MGA) Nexus Group lived up to its description as an “acquisitive insurance intermediary holding company,” with the purchase this week of an MGA and an insurance broker.
On April 1, Nexus acquired Capital Risks MGA Ltd. (CRML), a London-based MGA that specializes in warranty and indemnity insurance. On the same day, it announced that its newly formed independent broking arm, Xenia Broking Group, has acquired specialist trade credit broker Credit & Business Finance Ltd (CBF), which is based in Hertfordshire, England, and has three regional offices.
Financial details of the two deals were not disclosed.
Nexus provided descriptions of the companies and their personnel:
- Capital Risks MGA Ltd. CRML was launched by Nathan Sewell and Jason Edwards in August 2017 to provide transaction liability insurance for small and medium sized deals. Through the acquisition of CRML, Nexus has further augmented its financial and professional lines (FinPro) product offering, Nexus said.The CRML underwriting team, comprising Angus Ogg and Richard Mills, will continue with the business and move into Nexus’ London headquarters. Ogg holds the role of underwriting director and has more than 35 years of experience in the London market, having previously held senior positions at both insurers and MGAs. Mills is an associate underwriter and lawyer. Prior to joining CRML in 2018, he spent four years working on M&A transactions at city law firms.Nathan Sewell will remain on the CRML board as a non-executive director. Post-transaction, the business will be rebranded and trade as Nexus Transactional Risks. Nexus will appoint group CEO Colin Thompson and a number of other directors to the CRML board.
- Credit & Business Finance Ltd. CBF is the second trade credit broker Nexus has purchased, following the October 2017 acquisition of Credit Risk Solutions (CRS). With the CBF and CRS credit businesses, Xenia unites the two biggest producers of new-to-market business and will hold a share in excess of 11 percent of the estimated £350 million ($457.6 million) gross written premium for the UK trade credit broking market.CBF’s management team of Trevor Price, Matthew Green and Mark Kennedy will continue to run the business from their current offices. They will join the CRS directors on the board of Nexus’ broker arm, Xenia. The two businesses will integrate in due course with the process being driven by the directors of Xenia.
Nexus also announced that it has successfully concluded a second capital raise totaling £16 million ($20.9 million) that will enable it to further continue its merger and acquisition activity.
B.P. Marsh & Partners Plc, the venture capital provider to early stage financial services businesses, has provided Nexus, in which it holds an 18.5 percent shareholding, a £2 million ($2.6 million) revolving credit facility, as part of the £16 million ($20.9 million) capital fund raising exercise. The further £14 million ($18.3 million) came through undisclosed sources.
Clearwater International acted as Nexus’ corporate adviser for the capital raising.
Commenting on the acquisition of the warranty and indemnity MGA, CRML, Colin Thompson, Nexus founder and group CEO, said:
“This is an excellent opportunity for Nexus to further diversify into a growing product area with traditionally high barriers to entry through the acquisition of an MGA with highly attractive underwriting margins. Focussing on small and medium sized deals, CRML is a complementary fit with our existing FinPro book, which was the first class we launched in 2008 and now produces gross written premium of £50 million [$65.4 million].”
He said there are a number of cross-selling opportunities available across Nexus’ FinPro client base.
“The acquisition of CRML marks our 15th transaction and our second in a week where we also acquired trade credit broker Credit & Business Finance Ltd and launched Xenia Broking Group Ltd. This is an exciting time for Nexus and the completion of our second capital raising process means we will be able to continue on the dynamic growth strategy we are currently enjoying,” he continued.
The acquisition of Credit & Business Finance Ltd. is the first acquisition for Xenia and Nexus’ 14th historical acquisition.
Hiscox Global Flying Acquisition
Another recent Nexus acquisition was Hiscox Global Flying (HGF), announced in December 2018. That deal was completed via an asset purchase into Millstream Underwriting Ltd., a Nexus Group company that specializes in accident & health and travel insurance.
HGF provides insurance for aviation professionals to protect against the financial consequences of loss of license and training expenses after a bodily injury or illness. The business was established in 1996 and acquired by Hiscox in 2006. While full ownership of HGF was transferred to Millstream, Hiscox will continue to provide underwriting capacity for the business.
Source: Nexus Group
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