YFM backs the £17m MBO of loss adjusting and claims management specialist
Loss adjusting and claims management specialist GHG Limited near Southampton has funded its primary buy-out by securing a £7m equity investment from YFM Equity Partners (YFM). The deal, with a total value of £17m, is the first from the PE house’s £80m Buyout Fund II and marks the second investment made by YFM since the coronavirus pandemic began, following on from its investment into vehicle safety systems business ISS.
The buyout was led by GHG managing director Austin Snelgrove who, for the last three years, has been working alongside founder Graham High, as the business has continued to develop and grow its position in the loss adjusting market.
Founded in 1995 in Winchester, Hampshire, GHG specialises in developing bespoke claims management and loss adjusting for the UK insurance sector, covering both the domestic and commercial markets. With particular expertise in property, liability, subsidence and claims administration, it is well placed to offer a comprehensive service, including having specialist knowledge areas. The company has enjoyed a sustained period of growth after expanding its offering and has won a number of significant new contracts in recent years.
Spectrum Corporate Finance advised Graham High and other shareholders on the sale of the business and introduced the opportunity to YFM. Spectrum also advised shareholders on their reinvestment alongside YFM and Austin Snelgrove.
Graham High will continue to hold a significant shareholding in the business and remains committed to the future success of the company. He will retain a position on the board post-investment. Clive Nicholls, former UK CEO of Crawford, the UK’s largest loss adjuster, joins the business as non-executive chairman to support the company’s ambitious growth strategy.
Austin Snelgrove, managing director of GHG, commented: “Having learnt a massive amount from Graham’s extensive expertise, I am confident that both I and the business are ready for the next stage of the company’s development. I am really excited to continue to work with the excellent team we have built up, along with our engaged insurer partners, to develop new products and services to the exceptional standards that all our customers and their policyholders now expect and deserve.
“As a business whose success is based on its solid reputation and credibility within an exacting industry, we used the same criteria when choosing our investment partner. YFM has a strong track record of supporting regional businesses in their growth journey and this has very much been a local deal, supported by the expertise of local professionals.”
Graham High commented: “I have enjoyed my 25 years leading GHG limited and, having worked alongside Austin Snelgrove and the team for several years, I now take great pleasure in handing them control whilst maintaining my involvement in the business. This is an exciting stage of the development of GHG and the energy and commitment that the team brings to this transaction gives me great confidence for the future.”
Jamie Roberts, partner at YFM, added: “GHG has grown into one of the most reputable and trusted businesses in its field and is renowned for providing a high-quality loss adjusting product and for exceptional service levels. GHG is typical of the businesses that YFM want to support with a strong management team, expanding well and in a growth market. We look forward to working with Austin and Graham to continue that journey. The loss adjusting market is undergoing significant change and we believe GHG is exceptionally well placed to be at the forefront of that.”
Senior debt and a working capital facility is being provided by Triplepoint. Reece Digance, relationship director at Triplepoint added: “We are delighted to be partnering with Austin and YFM in their buyout of GHG as the debt funder by providing a flexible structure via a term loan and working capital facility. GHG is a successful, cash generative business and well placed to build on its previous successes and we look forward to supporting the team going forward.”
All advisers on the transaction were based in the local market. YFM was supported by BDO Corporate Finance in Reading as buy-side advisers; James Cowper Kreston’s Southampton office provided financial due diligence and tax due diligence; RPL advised on commercial due diligence; Stratton HR provided management due diligence; and Gateley’s Reading office provided legal advice. Shareholders were supported by Southampton law firm Paris Smith.
