REG - B.P. Marsh &Partners - Sale of Lilley Plummer Holdings Limited

B.P. Marsh & PartnersAnnouncement

29/10/2024 09:45

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RNS Number : 0472K  B.P. Marsh & Partners PLC  29 October 2024

29 October 2024

 

B.P. Marsh & Partners Plc

("B.P. Marsh", "the Company" or "the Group")

 

Sale of Lilley Plummer Holdings Limited ("Lilley Plummer Risks" or "LPR")

 

B.P. Marsh & Partners Plc (AIM: BPM), the specialist venture capital
investor in early-stage financial services businesses, is pleased to announce
the disposal of its fully diluted 28.4% shareholding in Lilley Plummer
Holdings Limited, the 100% owner of specialist Lloyd's broker Lilley Plummer
Risks Limited.

 

Highlights:

 

·    £21.65m (net of all transaction costs) cash consideration to be
received from the disposal of its 28.4% holding acquired for a Net Equity
Investment of £0.3m in Lilley Plummer Risks

·    £4.5m uplift (26%) from £17.1m valuation as at 31 July 2024 and
£8.1m uplift (60%) from £13.5m valuation as at 31 January 2024

·    Money multiple on Equity Investment of 71.4x

·    Internal rate of return to B.P. Marsh of 93.5%

 

Sale of Shareholding in Lilley Plummer Risks

 

B.P. Marsh has agreed to dispose of its shareholding in Lilley Plummer Risks,
the London-based Lloyd's Broker, pursuant to an agreement by which Clear
London Markets Limited ("Clear Insurance") has agreed to acquire the entire
issued share capital of Lilley Plummer Risks. Clear Insurance is majority
owned by Goldman Sachs.

 

Background to the Investment

 

B.P. Marsh invested in Lilley Plummer Risks in October 2019, when the Company
acquired a 30% equity stake for a total cash consideration of £1m, in a
mixture of Redeemable and Non-Redeemable Preference shares. The Redeemable
Shares (£0.7m) of the Group's investment were redeemed in June 2023.

 

As a start-up business, Lilley Plummer Risks achieved brokerage of £1.8m and
EBITDA of £0.4m in its first full year to 31 December 2020. In its year
ending 31 December 2024, Lilley Plummer Risks is forecasting to achieve
brokerage of £12.7m and an adjusted EBITDA of £6.1m.

 

The Transaction

 

Upon completion, the Group will receive £21.65m in cash (net of all
transaction costs). This represents a £4.5m uplift (26%) from the £17.1m
valuation as at 31 July 2024.

 

Subject to adjustments at completion, and combined with current cash and
equivalent resources, B.P. Marsh expects to have funds available of
approximately £100.0m (after transaction costs and tax).

 

Abigail Benson, the Company's Nominee Director on the Board of Lilley Plummer
Risks, will resign from this role on completion of the sale.

 

Commenting on this disposal, the Group's Chief Investment Officer, Dan Topping
stated:

 

"It has been a pleasure to work with Stuart Lilley, Dan Plummer and the team
at Lilley Plummer Risks over the last five years.

 

The Group's founding investment in Lilley Plummer Risks, and its eventual
sale, is testament to our approach in seeking partnerships with skilled
management teams to create and ultimately realise value for our shareholders.

 

We are delighted to have been part of the growth of Lilley Plummer Risks and
wish the whole team all the very best for the next chapter in their growth and
development in partnership with Clear Insurance."

 

Commenting on this disposal, Stuart Lilley (CEO) and Dan Plummer (Managing
Director), added:

 

"It has been a privilege to have been a part of the B.P. Marsh portfolio over
the last five years.

 

As valued partners, Dan and Abi have been instrumental in helping the business
grow to a level that leads us into an exciting new chapter with The Clear
Group and Goldman Sachs.

 

We would like to sincerely thank everyone at B.P. Marsh for all their expert
guidance and friendship since forming LPR back in October 2019 and wish them
all the very best for the future."

 

Use of Proceeds

 

The Board of B.P. Marsh intends to continue to strike a balance between
utilising funds for investment for long-term capital growth opportunities
across the existing portfolio and new ventures, whilst providing shareholders
with a meaningful ongoing return.

 

Given the cash realisation following the disposal of Lilley Plummer Risks and
the strong capital position of the Group, it is the Board's intention to
distribute a further £7m by way of dividends over the next three years, which
will be allocated as follows:-

 

-     In the year ending 31 January 2026 it has been agreed to increase
the previously announced dividend allocation from £4m to £5m;

 

-     In the year ending 31 January 2027 it has been agreed to increase
the previously announced dividend allocation from £4m to £5m; and

 

-     In the year ending 31 January 2028 it has been agreed to extend the
dividend policy and pay an additional £5m.

 

We believe this proposal is consistent with the Group's long term capital
management strategy which allows the Company to maintain its existing
investment strategy whilst also rewarding shareholders.

 

In the year ended 31 January 2024 Lilley Plummer Risks contributed £0.4m
income and the Board is confident it will be able to replace the historical
contribution from Lilley Plummer Risks as a result of reinvestment of the
proceeds which will be received.

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue
of the European Union (Withdrawal) Act 2018.

 

 For further information, please visit www.bpmarsh.co.uk
 (http://www.bpmarsh.co.uk) or contact:

 B.P. Marsh & Partners Plc                            +44 (0)20 7233 3112

 Brian Marsh OBE / Alice Foulk

 Nominated Adviser & Joint Corporate Broker:          +44 (0)20 78862500

 Panmure Liberum Limited

 Atholl Tweedie / Amrit Mahbubani / Ailsa MacMaster

 Joint Corporate Broker:                              +44 (0)20 7496 3000

 Singer Capital Markets Advisory LLP

 Charles Leigh Pemberton / James Moat / Asha Chotai

 Financial PR & Investor Relations:                   bpmarsh@tavistock.co.uk (mailto:bpmarsh@tavistock.co.uk)

 Tavistock                                            +44 (0)20 7920 3150

 Simon Hudson / Katie Hopkins

 

Notes to Editors:

 

B.P. Marsh's current portfolio contains sixteen companies. More detailed
descriptions of the portfolio can be found at www.bpmarsh.co.uk
(http://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. Many of the directors have worked with
each other in previous roles, and all have worked with each other for over ten
years.

 

- Ends -

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