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BP Marsh increases Nexus stake

October 30, 2018

BP Marsh has upped its stake in Nexus by 1.9 percent as it revealed that the specialty managing general agency (MGA) has ended its previously announced ownership review.

In a stock exchange announcement on 30 October, the private equity investor said that it paid a £2.5mn cash consideration for the stake, which it said is in line with its valuation of Nexus as of 31 July 2018. 

BP Marsh said it had purchased the shares from a non-executive director of Nexus - Hugh Morland. This brings its aggregate shareholding in Nexus to 18.5 percent.

Earlier this year, Nexus revealed that it was considering options for a “potential liquidity event” in 2018.

However, BP Marsh noted that “this has been duly explored, with the board of Nexus reaffirming its existing growth strategy in line with its continuing shareholder base.”

“The outcome of this strategic review has the full support of BP Marsh, which is emphasised by this additional share purchase,”it said in the stock exchange announcement.

Nexus recently announced the acquisitions of Asian structured solutions specialist Huntington Underwriting Limited on 6 September 2018 and Altitude Risk Partners, a London-based aviation MGA, on 7 September 2018.

Following these transactions, Nexus estimates that for the year ending 31 December 2018, the business will underwrite premium income of $350mn across 15 specialised classes of business and deliver income of approximately £41mn and EBITDA of approximately £15mn.

Daniel Topping, BP Marsh's chief investment officer and the company's nominee director on the board of Nexus commented: "We are pleased to increase our shareholding in Nexus, as it continues on its exciting growth trajectory. I see this as a vote of confidence in Nexus' existing strategy."