Reports suggest that investment firms British Columbia Investment Management Corp. (BCI) and Preservation Capital Partners are mulling the sale of global insurance and reinsurance broker BMS Group.
According to a Bloomberg report, citing people familiar with the matter, a sale of BMS could value the broker at more than £600 million (USD 720m).
The people told Bloomberg that both BCI and Preservation Capital are working with Evercore Inc. to explore strategic options for the international re/insurance broking business, which generates some £100 million in annual earnings.
According to the sources, financing for a deal is attracting the interest of banks and also providers of private debt. However, the people explained that discussions are ongoing and there’s no guarantee a sale will come to fruition.
Back in 2019, BMS Group completed its equity investment from BCI and Preservation Capital, which valued the broker at £500 million (USD 636m in 2019 dollars).
Following the investment, management and staff of BMS maintained a significant shareholding in the company, while representatives from BCI and Preservation Capital joined the BMS board.
BCI is one of the largest institutional investors in Canada. Preservation Capital, which is led by former Warburg Pincus dealmaker, Jatender Aujla, typically makes equity investments of £50 million to £150 million, reports Bloomberg.
Update: Our sources suggest an outright sale of the investor stakes is considered less likely, than BMS potentially expanding its capital base through any transaction that occurs.
This could include new investor backing entering the business, with the potential for the existing backers to sell part of their stakes to accommodate that, although at this time we’re told there isn’t any imminent deal.
We’re told the broker is considering its options, as it looks for a route to fuel further growth.
