Tysers £110mn+ valuation to reward executive shareholders

06 October 2017

The merry go-round of consolidation among London’s independent brokers, together with private equity’s enthusiasm for distribution businesses, has meant there are very few £50mn+ revenue firms remaining in EC3 that are still owned by its management and staff.

And there will be one fewer if Tysers – a Lloyd’s broker with pedigree going back to 1820 – is sold.

Yesterday (5th October), Reinsurance exclusively revealed that the PE-backed US broker Integro was in advanced talks to acquire the firm following a sale process that had seen it, together with RFIB and AmWINS, short-listed (see page 3 for greater analysis).

According to sources, Integro is thought to have valued the firm at circa £110mn, or approximately 2x annual revenues, for the business.

Analysis by Reinsurance highlights that any consideration will be spread widely among the group’s senior management and staff with Gary Andrews, the head of Tysers’ North America, and Chris Elliott, its former CEO, both owning 10 percent of the undiluted, pre-sale equity, according to records at UK companies house.

If the shares are not diluted post-sale, and the ultimate sale proceeds are around £110mn, then this would equate to £11mn each as they both own 2,500,000 Class B shares in Tysers’ ultimate holding company, Hawkes Bay Holdings Ltd.

Hawkes Bay equity consists of 25mn shares, divided between Class A (non-voting) and Class B shares. Class A shares are spread widely, with 97 different Tysers’ existing and former employees holding equity but the majority of the sizeable holdings are held by Tysers’ senior management’s Class B holdings (see table).

Behind Andrews and Elliott is the Tysers Group Employee Trust with a non-diluted holding of 6.1 percent.

The next largest shareholder is Quintin Heaney, the former Tysers COO who was ousted in acrimonious circumstances in 2013. Mr and Mrs Heaney have a holding equivalent to 5.625 percent.

The managing director of Tysers’ marine business, Jonathan Macey, has a holding of 5.45 percent while current interim CEO Christopher Spratt has a five percent holding.

David Randle, the MD of Tysers International, and former chairman, Roger Marsh, also own 5 percent each.

Another notable shareholder is Tysers’ well-regarded MD Henrietta Butcher, with an undiluted 4 percent holding. By coincidence, her husband Joe Butcher is a senior executive and shareholder at Lloyd’s insurer Novae plc which has just been acquired by AXIS Capital in a £480mn deal. re