Montagu closes Open exit

The deal was Towergate’s largest ever purchase at £276m, and includes all of its subsidiaries – Open GI, the Countrywide Network, and MI Ltd – which will remain operating under its own name with existing CEO Phillip Bell still in charge.

Bell said: “The opportunity to agree a deal with the UK’s largest and most influential intermediary made sound business sense as it benefits all of our stakeholders. Open International has worked closely with Towergate for many years and we share a commitment to the broker market, product distribution and more importantly, an understanding of the wider market.”

Open GI has around 40% of the UK broker market and has strong partnerships with all major insurers. It is the largest supplier of broking and underwriting systems to Towergate who have over 1,000 users, and the transaction will serve to secure and enhance their IT platform and future systems development.

Montagu bought Open in March 2006, paying Misys £182m for what was then called Misys General Insurance. As well as changing its name, the company expanded its London presence with the purchase of MI, which provides IT solutions to insurance brokers in the City. In May 2007, Open International reported an annual turnover of £35m with an operating profit of £18.8m.

Jason Gatenby, director of Montagu, said: “We are proud of our association with Open. Under our ownership the company has launched a fully updated product suite and made a strategically important acquisition. We believe Towergate is the right long term home for the business and we wish everyone at Open the best for the future.”

Bank of Scotland was the arranger on the financing of the deal, and Towergate does not intend to stop now. The company has an acquisition fund with over £200m remaining, and Towergate’s Chairman, Peter Cullum, says he expects to make four or five significant acquisitions before the year is out.

It is Montagu’s third exit this year after Cory Environmental was sold to a consortium of ABN AMRO Global Infrastructure Fund, Finpro SGPS and Santander Private Equity, and HCT Shaping Systems acquired by Applied Materials, a US technology group. The firm has also announced two investments this year: Unifeeder, a German feeder operator, and ghd, the British hair styling brand.