British insurer Abbey Protection sold to US company for £116m

BRITISH insurance company Abbey Protection was yesterday sold to US firm Markel for £116.5m, ending its 21 year stint as an independent company.

Aim-listed Abbey specialises in providing insurance products for legal expenses. The deal will result in a bumper £65m payday for the company’s management team, who collectively own around more than half of the company’s shares.

Abbey’s board unanimously recommended the deal for approval at 115p a share, despite the shares having traded above this level for most of the last three months. Investors yesterday responded by selling off their holdings, driving the price down 5.6 per cent.

“As Abbey Protection looks to the next stage of its growth strategy, the board of Abbey Protection believes that now is the right time for a change of ownership,” said chairman Tony Shearer.

Abbey’s pre-tax profits currently stand at £10.3m a year.

Abbey, headquartered on Minories in the City’s insurance district, will now become part of the US insurance group. It is expected to continue to operate under its own name for the forseeable future.

“From our first meeting it was clear that there was a strong cultural fit between our organisations,” said Markel president and chief operating officer William Stovin, who indicated key Abbey staff would remain with the company.

ADVISERS

GUY WIEHAN
PEEL HUNT

HARRY FLORRY
PEEL HUNT

Broker and advisory house Peel Hunt were yesterday celebrating after successfully advising US insurer Markel on its £116.5m purchase of UK business Abbey Protection.

It is the second major deal involving the company this week, following its role on the sale of a 50 per cent stake in Hastings Insurance to an arm of banking giant Goldman Sachs.

Peel Hunt’s team on the Abbey Protection purchase was led by Guy Wiehan, the company’s head of financial services, who is a UK corporate broking and corporate finance specialist with 15 years’ experience in the field.

Wiehan’s corporate clients include Rathbones, Miton Group and Charles Stanley, while his previous M&A deals include the acquisition of transport group TDG, the purchase of PSigma asset management, and the sale of Heritage Underwriting.

Wiehan’s team included Harry Florry, who joined Peel Hunt from Brewin Dolphin in 2010 and was recently involved in the £5.6m reverse takeover of bioscience firm IXICO and a share placing in Sphere Medical.

Media support on the transaction was provided by Ed Berry and Tom Willetts at FTI Consulting, while PricewaterhouseCoopers and broker Shore Capital provided advice to Abbey Protection.