RMS, one of the leading catastrophe risk modelling companies serving the insurance and reinsurance industry, is being offered for sale by its ultimate owner DMGT (Daily Mail and General Trust plc).
DMGT said this morning in announcing a possible reorganisation and acquisition of all of its shares by its main holder, the Lord Rothermere controlled Rothermere Continuation Limited (RCL), that “Following a number of enquiries from third parties, it is in discussions in relation to the sale of its Insurance Risk division (RMS)”
This morning, “DMGT announced that its controlling shareholder, Rothermere Continuation Limited (RCL), had notified it of a possible offer for the entire share capital of DMGT not already owned by RCL. The possible offer is subject to a number of pre-conditions and, even if satisfied, there can be no certainty that an offer will be made,” the company explained.
Adding that, “One of the pre-conditions is the successful sale of RMS, DMGT’s Insurance Risk business, at a premium valuation. The potential sale of RMS was announced at the same time as the possible offer.”
The Board of DMGT believe that a sale of RMS would deliver a premium for its shareholders and if terms are agreed the sale would be expected to go ahead in Q3 2021, it said.
A sale of RMS would be a “significant milestone” in the transformation of DMGT the company said, delivering “substantial cash proceeds.”
DMGT cautioned that “discussions are ongoing and there can be no certainty that a transaction will result,” but it believes any price secured for the catastrophe risk modeller RMS would be at a premium valuation.
It will be interesting to see who a buyer could be for RMS.
With the development of the SPAC acquisition marketplace, such a route would not be a complete surprise. Although an existing insurance technology player could also be an acquirer, or private equity buyers that recognise the potential to further develop RMS into an industry leading tech provider.