Insurance firm on a takeover spree

Jan 15 2009 by Peter McCusker, The Journal

THE UK’s fastest-growing insurance broker says it is on the lookout for further North East acquisitions after snapping up its second regional firm.

Durham-based Arnott Commercial Insurance Services and Arnott Marine has been bought by Giles Insurance, of Glasgow.

In April last year Giles, which is backed by private equity firm Charterhouse Capital Partners, snapped up Elliott Garden Insurance with offices in Houghton-le-Spring and Washington.

Giles’ aim is to become the largest independent broker in the UK and with more than 2,000 independent firms left in the UK – including a number in the North East – further purchases will follow.

Peter Flockhart, a member of the Giles mergers and acquisitions team, said: “The insurance market is highly-fragmented and this is giving us the opportunity to grow our presence across the UK. With our private equity backers, we have the firepower to continue our rapid expansion and we will be looking for further targets in the North East.”

Arnott, which was set up in 1996 and was formerly owned by the now deceased former Gretna FC owner Brooks Myleson, employs 23 people, and had revenues of £1.9m last year.

Its marine insurance division began operating three years ago, and quickly built links with Lloyds and UK companies’ markets and a strong client list.

Chris Giles, chief executive of Giles, said: “The acquisition of Arnott is a very significant step in developing our position in the North East with an established and well respected business.

“Furthermore, we see great opportunities in the marine sector and will seek to grow our presence further in the near future.”

Gerard O’Connor, managing director of Arnott Commercial Insurance, will continue to head the business, which he believes now has the strength and resources to grow in the future.

He said: “Arnott’s standards and approach have a synergy with Giles which will help us develop the business regionally and nationally.”

Giles employs more than 900 employees and places more than £300m premium annually. It has offices across the UK, including Glasgow, Leeds, Manchester, Birmingham, Cardiff and London.

It was established in 1967 and in 2007 Giles was acquired by private equity firm Charterhouse Capital Partners and, with support from the Bank of Scotland, it now has a £500m acquisition fund.

Elliott Garden, which employs over 40 people, with an annual insurance premium income of around £10m in both the commercial and personal sectors, was Giles’ first purchase.

Watson Burton law firm advised Arnott on the successful sale. Robin Adams, Watson Burton partner, said: “This is a well-thought-out move for Arnott which should open new opportunities for the group. Although it brings to an end a familiar name in the region’s insurance services, it introduces a new brand – Giles Insurance Brokers – to the North East for the first time.”