Big mergers are great in theory, but the UK CMA (Competition and Markets Authority) which scuppered the Bennetts-Carole Nash deal, may yet decide this isn’t a super deal for UK consumers. Interesting to see Bain Capital back in the fray after the LV= deal fell apart last year too.
So will it get regulatory approval? According to Consumer Intelligence, Markerstudy/BGL has about 8% of the UK motor insurance market at present. Statista disagrees and does not place Markerstudy in the Motor premium top ten by market share for 2022. We can probably agree that neither group is one of the really big players in the lucrative Motor sector.
So it’s possible that the merger of brands like BGL, Co-op, Brightside etc with Marmalade, Swinton, Be Wiser, Carole Nash and Autonet isn’t seen as being a major threat to big players like Direct Line, Admiral, Aviva, LV= and others. In fact given the recent FCA comments re Direct Line valuations, the proposed Atlanta-Marker deal may get the nod of approval, if only as a bulwark against established players in the Motor premiums Premiership. Assuming the merger goes ahead it could be wise to merge some of the many niche broker brands in the new umbrella operation?
Here’s the word from Ardonagh:
The Ardonagh Group (“Ardonagh”) and Markerstudy Group (“Markerstudy”) have agreed a merger between Markerstudy and Atlanta Group (“Atlanta”), Ardonagh’s personal lines broking business, to create a major new player in the UK insurance market. The combined business will provide a wide range of insurance products to millions of consumers, including home and motor insurance, and will employ around 7,300 people across the UK. It will transact over £3 billion in annual Gross Written Premium (GWP).
The transaction, which is subject to customary conditions (including regulatory approvals), values Atlanta at £1.2 billion and will be funded by a new investment led by Pollen Street Capital and Bain Capital Special Situations. Ardonagh and its related parties will receive a combination of cash and a substantial minority equity stake in the combined business, in addition to two seats on the board of directors of the combined business.
Key Atlanta executives including Ian Donaldson, Craig Ball and Emma Rawlinson will join the Markerstudy management team as senior executives of the combined group.
With more than 2,100 colleagues across 12 locations, Atlanta manages c.£1 billion of GWP on behalf of 2.6 million customers. It distributes a broad suite of products through household insurance brands including Swinton, van specialist Autonet and motorcycle experts Carole Nash.
Markerstudy offers omni-channel distribution and a broad product proposition to approximately 6 million customers across motor, pet, home and commercial (particularly SME). The company has upwards of 5,200 colleagues, across 19 sites, and reported GWP of £2 billion in 2022. The combined group will bring together highly complementary capabilities across pricing, underwriting and distribution and as a result will deliver an enhanced proposition for millions of new and existing customers.
Kevin Spencer, Markerstudy Group CEO, said: “As existing business partners, we have worked closely with Atlanta for a long time, and so we know first-hand just how exceptional the business and its people are. There are few deals in the market with the potential to be truly transformational for all parties concerned and a combination with Atlanta has been a long-term ambition of ours. The strong alignment in our models and shared values and ambitions simply could not be ignored. I’ve never been more excited for the future.”
Ian Donaldson, CEO of Ardonagh Retail, comments: “The coming together of well-known insurance brands and talent from across Atlanta and Markerstudy creates a major new player in the UK insurance industry and is the latest chapter in our phenomenal growth story. With the support and backing of the Ardonagh Group, Atlanta has evolved from the van broker Autonet, into a major multi-product, multi-brand insurance challenger in the UK. This transaction is a huge testament to our people and we look forward to working with Kevin and his team to continue innovating and providing great value to our customers.”
David Ross, CEO of The Ardonagh Group, said: “The Ardonagh strategy has always been to find and empower strong management teams, and to back their ambitions with a clear and relentless focus on equity value creation. This combination with Markerstudy is an important step in the Atlanta journey, and presents compelling opportunities for its customers and people. We are very proud of what the Atlanta team have achieved since joining our Group in 2017 and look forward to continuing to work with Kevin, Ian and our new partners at Pollen Street to create a major new player in the UK insurance market.”
Michael England, partner at Pollen Street, said: “We are thrilled to support this merger. Under Ian’s leadership Atlanta has expanded through organic growth initiatives and targeted M&A into a high quality distribution platform. Similarly Markerstudy has developed rapidly, growing strongly since we invested in 2021. In combining the two businesses we have an exceptional opportunity to support this major new platform.”