GRP to close "a number of deals" within weeks

Global Risk Partners (GRP) expects to complete a number of deals in the next few weeks, according to group chief executive officer Mike Bruce.

Bruce told Insurance Age that some of the firm’s due diligence processes had “slowed down” in the last few months due to Covid-19, but noted that its M&A activity was now gaining momentum again.

“We tend to be like London buses in terms of deals, we’ll have a slight hiatus for six weeks and then suddenly we’ll do three in a couple of weeks,” he added.

“That’s just how things work. But the M&A team is very busy at the moment.”

According to Bruce, Covid-19 had also seen a number of smaller brokers “looking for a safe port in the storm”.

“Being part of a larger group can deliver a bit more security and certainty in these very uncertain times,” he continued.

Deal
Last week, Searchlight Capital Partners completed its deal to buy a majority stake in GRP. The move was first flagged in February and followed months of speculation.

Bruce, who as part of the deal moved from MD to group CEO, explained that the private equity business had “absolutely bought in to the key components” of GRP’s current buy-and-build strategy.

“That’s what’s allowed us to build a business from nothing to £50m Ebitda run rate in six years and we must be doing something right so we’re not about to throw that away to start again from scratch,” he noted.

However, he stated that one of the reasons that GRP was keen to work with Searchlight was to gain access to knowledge within its other portfolio companies, including around digital capabilities.

Expansion
In addition, GRP is also set to branch into new product lines.

The CEO added: “We’re looking at what the customer needs and what the gaps in our portfolio are.”

He highlighted that Searchlight is bringing “plenty of firepower to the party” and that GRP is looking to expand across all three of its divisions - retail broking, managing general agents and Lloyd’s.

“Clearly when you go through a process of looking for new investors it endorses key parts of the model and maybe gets an external view on parts of the business that you can do better,” Bruce continued.

“We had a lot of interest from potential partners and we have learned from that exercise. We’d be stupid to ignore that external feedback.”

Management
Insurance Age reported last August that GRP founders, Peter Cullum and David Margrett, were seeking to dilute their stake in the business but retain an interest.

The Searchlight deal will see Cullum and Margrett as well as founding investor Penta Capital retain minority stakes in the company, alongside the broader management team.

Commenting on the management changes, Bruce said: “I was group MD for many months before the deal went through so the scope pf my role internally stays the same.

“Peter and David are moving from executive roles to non-executive roles so they’re absolutely not disappearing from the business. There’s a good clear line in the history and the future of GRP.”

Covid-19
According to Bruce, GRP has “functioned really well” as a business during the current coronavirus pandemic.

He outlined that 99% of staff were working from home “within a very short space of time” and that people had responded “massively positively”.

“It’s a bit of a vindication of the level of integration that we do,” Bruce continued.

“If we had been an uncoordinated business we wouldn’t have been able to mobilise all of our resources and get the whole business working from home within hours.”

GRP is now set to adopt a more flexible working model going forward, but the plan is to keep all of its local branches.

“The days of everyone rocking up for 37 hours sitting in an office are long gone for most people,” Bruce concluded.  

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