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Howden Has $1.4 Billion for Progress, Might Faucet New Investor for Additional Firepower

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Howden, one of many world’s largest privately owned insurance coverage brokers, has 1.1 billion kilos ($1.4 billion) for progress, together with acquisitions, and has had curiosity from potential new shareholders to again a big deal if wanted, its administration advised Reuters.

The British group this week reported a 30% leap in core earnings to 780 million kilos within the 12 months to September 30, 2023, partly pushed by acquisitions. It additionally raised $6.1 billion in debt to refinance present borrowings and lift money.

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After the refinancing, Howden has 1.1 billion kilos of money on its steadiness sheet to spend on offers, hires and shopping for out worker shareholders, CFO Mark Craig stated in an interview.

The corporate is concentrated on smaller “tuck-in” acquisitions of as much as 150 million kilos in areas just like the UK, continental Europe and Asia-Pacific, Craig and the group’s CEO and founder, David Howden, stated.

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It stays open to extra transformational transactions, which may very well be partly financed by an exterior fairness investor, they stated.

“That technique is one thing that we might undoubtedly be open to,” Howden stated when requested concerning the prospect of latest buyers becoming a member of the corporate.

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“We’ve received lots of people knocking on the door,” Craig added.

Insurance coverage broking stays an lively nook of the M&A market regardless of a slowdown in world deal volumes amid excessive rates of interest.

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Insurance coverage broking offers in Europe elevated by 19% to 229 within the first half of final 12 months, lots of which had been backed by non-public fairness, in response to a report by FTI Consulting.

Howden alone accomplished 56 acquisitions worldwide over the course of 2023, together with a tie-up with reinsurance specialist TigerRisk.

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The group, previously often called Hyperion, secured a minority funding from buyout group Normal Atlantic in 2013 and Canadian pension fund CDPQ and personal fairness agency Hg have additionally made investments within the following years.

Greater than 4,000 workers management a couple of third of the group, in response to its web site.

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Requested a couple of future exit for the corporate’s institutional backers, Howden stated he didn’t count on them to go away in the meanwhile, having injected contemporary capital into the enterprise final 12 months to assist progress.

An preliminary public providing may very well be an choice sooner or later, he stated.

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($1 = 0.7943 kilos)

(Reporting by Pablo Mayo Cerqueiro in London; enhancing by Anousha Sakoui, Jane Merriman and Chizu Nomiyama)

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