TIDMBPM
RNS Number : 4059O
B.P. Marsh & Partners PLC
07 October 2021
Date: 7 October 2021
B.P. Marsh & Partners Plc
("B.P. Marsh", "the Company" or "the Group")
Investee Company Update - XPT Group LLC
B.P. Marsh & Partners Plc (AIM: BPM), the specialist
investor in early stage financial services businesses, is pleased
to announce that XPT Group LLC ("XPT"), the U.S. based specialty
lines insurance distribution company, has successfully completed a
fund-raising exercise and complementary acquisition.
XPT to acquire S&H Underwriters, Inc.
S&H Underwriters, Inc. ("S&H") is a Managing General
Agent and surplus lines broker and binding authority business based
in Barre, Vermont. S&H works with retail clients in personal
and commercial excess, surplus and speciality lines throughout New
England and the Mid-Atlantic States.
S&H was founded in 1998 and was a family-owned business,
with the owners Patrick and Betty Sikora remaining within the
business post transaction, reporting to Kyle Stevens, who heads up
XPT's binding and small insured business broking division.
S&H are budgeting to place Gross Written Premium approaching
$15,000,000 in 2021.
This acquisition, paid for with a mixture of cash and XPT
equity, provides several benefits to XPT. Firstly, S&H will
expand XPT's geographic footprint across the US into New
England.
This acquisition also brings additional expertise in product
lines that intersect with XPT's current business and the addition
of key markets, especially in the Lloyd's of London market.
XPT will provide S&H with the opportunity to expand its
product offerings to existing clients, including Bars and Taverns
and General Binding Authority business.
The acquisition of S&H is a continuation of XPT's strategy
of acquiring specialist wholesale brokers and binding authorities
that place hard to insure risks through wholesale distribution
channels.
Fundraising
XPT has secured an additional $30,250,000 in debt financing from
Madison Capital Funding LLC ("Madison"), over and above XPT's
existing banking facilities with Madison of $37,400,000. XPT have
also increased their existing revolving credit facility with
Madison to $3,000,000, an increase of $1,000,000. This revolving
credit facility is not being currently utilised by XPT.
Upon completing these new loan facilities, XPT drew down
$15,250,000, with the remaining $15,000,000 being available via a
draw down facility.
Madison, founded in 2001, is a market leader in providing middle
market companies with debt solutions and is a leader in financing
the insurance distribution sector. Madison is backed by the
financial strength and stability of New York Life Insurance Company
and has $10.6 billion of assets under management, exclusively
investing alongside private equity sponsors and other
investors.
This financing provides XPT with an opportunity to make further
acquisitions and enter the next phase of its growth. The initial
drawdown will be used to finance the S&H acquisition, alongside
the payment of previously agreed successful earn out arrangements
from other recently acquired businesses.
As part of this transaction, an independent valuation of XPT was
undertaken which produces a 100% Equity valuation for XPT of
$67,172,000 (or GBP49,464,000), inclusive of S&H.
Following the acquisition of S&H, B.P. Marsh will have a
revised fully diluted shareholding (including warrants) of 28.6% in
XPT. This would result in an implied valuation of our holding in
XPT at GBP14,300,000, compared to our most recently announced
valuation (as at 31 January 2021) of GBP12,812,000, an increase of
GBP1,488,000.
On the latest acquisition Tom Ruggieri, a founding partner at
XPT stated:
"Our team has known Betty and Pat Sikora for years and they are
a great fit to our collaborative partnership platform. The new
partnership expands us into the Northeast and creates growth
opportunities for our Binding and Program products."
"The Madison expansion allows us to continue to seek the right
partners and to continue our strong hiring of new specialist
producers".
Commenting on the recent activity, the Group's Chief Investment
Officer and Member Representative at XPT, Daniel Topping, said:
"The additional fundraising with Madison is a tremendous
milestone in XPT's ongoing development and growth. XPT is now on
track to control Gross Written Premiums of approaching $380m in
2021, inclusive of the S&H acquisition. This is an outstanding
achievement by the XPT team, and we look forward to further
supporting their growth".
For further information:
B.P. Marsh & Partners Plc www.bpmarsh.co.uk
Brian Marsh OBE +44 (0)20 7233 3112
Nominated Adviser & Broker
Panmure Gordon
Atholl Tweedie / Charles Leigh-Pemberton
/ Ailsa MacMaster +44 (0)20 7886 2500
Financial PR & Investor Relations
Tavistock bpmarsh@tavistock.co.uk
Simon Hudson / Tim Pearson +44 (0)20 7920 3150
Notes to Editors:
B.P. Marsh's current portfolio contains seventeen companies.
More detailed descriptions of the portfolio can be found at
www.bpmarsh.co.uk .
Since formation over 30 years ago, the Company has assembled a
management team with considerable experience both in the financial
services sector and in managing private equity investments. Several
of the directors have worked with each other in previous roles, and
all have worked with each other for more than ten years.
- Ends -
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