Independent specialty intermediary Nexus Group has successfully completed its £70 million refinancing effort via a loan facility with Barings.
This previously-announced facility will be utilised in two ways, with £50 million being used to refinance existing debt and meet upcoming deferred consideration payments, with the balance available for new acquisitions.
Furthermore, this financing is aimed at providing Nexus with the opportunity to make further acquisitions and enter the next phase of its growth.
The additional £20 million will be used to continue Nexus’ proven buy and build M&A strategy.
The facility also has a significant accordion that offers additional support for future acquisitions or a transformational deal.
“When Nexus first raised debt capital in 2017, we were valued at £75m and had concluded five acquisitions. That capital raise enabled the conclusion of 15 further acquisitions and, alongside strong organic growth, helped drive a 3.1x increase in the equity value of Nexus to £234m as at 31st January 2021,” said Colin Thompson, Founder and Chief Executive Officer of Nexus.
“In Barings, we are delighted to have a top tier institution to support the next stage of our growth.
“This financing capacity provides the additional firepower to back a very developed M&A strategy and take advantage of an active pipeline of opportunities.
“This includes a diverse range of global specialty MGA targets alongside a number of prospects that would complement our broking group, Xenia.
“We are witnessing a substantial bounce back in COVID-19 impacted areas, persistent rate hardening across all classes of business and a number of positive organic initiatives.
“Coupled with this debt raise and our M&A blueprint, we are now perfectly positioned to accelerate towards our stated $1bn GWP target in the near future.”
Matt Carty, Director for Barings Global Private Finance, added, “Nexus has an excellent track record of successfully completing and integrating acquisitions, so Barings is very pleased to have the opportunity to support them in continuing with this strategy.
“We appreciate the trust Colin and the rest of the leadership team have placed in us and look forward to working with them.”
