R&Q to sell insurance and captive businesses to Davies Group for £20m


Randall & Quilter Investment Holdings (R&Q) is selling its insurance services and captive managements operations to Davies Group, an operations management, consultancy and digital solutions provider.

The transaction includes the sale of the entire share capital of JMD Specialist Insurance Services Group and its subsidiaries, R&Queim, John Health & Company and AM Associates Insurance Services, along with Randall & Quilter Bermuda Holdings and its Quest subsidiaries.

The businesses being sold have been valued at £20 million altogether. The net cash consideration payable by Davies, after deducting net debt applicable to the businesses, is approximately £18.6 million.

R&Q expects the overall impact of the disposal to be broadly neutral to book value and earnings after allowance for transaction expenses, related incentive payments, working capital adjustments and goodwill written off.

Furthermore, R&Q said there will be a consequential uplift to the Group’s tangible net assets of approximately £12m as a result of the transfer of value from goodwill to cash, as anticipated in the October 2017 share placing.

Net proceeds of the sale will be used to help finance R&Q's legacy transaction pipeline, in particular in the US and Lloyd's, and to generate commission income from the use of accredited and Malta’s direct licenses.

Ken Randall, R&Q Chairman and CEO, commented: "The sale of our Insurance Services and Captive Management operations is a significant milestone in the group's decision to simplify its operations and focus on our core areas of legacy acquisitions and the writing of quality programme business, which is mostly reinsured to highly rated reinsurers.

“The insurance Services and captive management operations are market leading, well-developed and scalable and we are confident the operations will prosper under the stewardship of Davies.  As we have progressed discussions with Davies we have developed a good working relationship and hope to be able to develop business between our two organisations in the future.”

He continued: “The sale will enable us to focus further on our core operations where we remain excited about the growth potential in the current year and beyond, underpinning the Group’s financial performance and distribution policy.”

R&Q, Davies Group, M&A, UK, Bermuda, North America

Captive International