BGC Partners has entered into an agreement to sell its Insurance Brokerage business for $500 million to The Ardonagh Group.
Ed Broking Group and Besso Insurance, recently grouped together under the brand of Corant Global, comprise of global wholesale and specialty re/insurance broker Ed, Lloyd’s broker Besso, aviation specialist Piiq Risk Partners, German marine broker Junge, UK based MGA Globe Underwriting, Australian MGA Epsilon Underwriting and European MGA Cooper Gay.
The agreement to sell the business is seen as a reflection on the value BCG created since entering the space in 2017.
Howard W. Lutnick, Chairman and Chief Executive Officer of BGC, said, “While we have built an exceptional Insurance Brokerage business, this sale will focus our resources on Fenics. We expect to use the proceeds to accelerate Fenics growth and to repurchase shares and/or units.
“Ardonagh is an excellent partner to continue our Insurance Brokerage business. The combined platform will add to their strength, capability, and create the world’s leading independent specialty insurance broker.
“While our Insurance Brokerage business provided less than 10 percent of BGC’s total revenue over the trailing twelve-months1, the $500 million of cash that we expect to receive represents over 17 percent of BGC’s fully diluted market capitalization.”
Ardonagh, meanwhile, intends to fund the acquisition via a combination of equity and debt.
Commenting on the announcement, Ardonagh CEO, David Ross, noted “We’re delighted to welcome each of BGC’s insurance brokerage businesses to our Ardonagh Specialty platform.
“This is a compelling shakeup of the global wholesale landscape, bringing two of the last remaining independent outfits of scale together to create the largest privately owned specialty broker in London, safeguarding choice for both clients and employees.
“A backdrop of unprecedented levels of consolidation has created a vacuum in the market, a space from which the BGC and Ardonagh businesses will emerge together as a preeminent force, restoring balance and cultivating a preferred destination for top-performing talent.”