Montagu sells Open International

Towergate, the privately owned insurance broker, has acquired Open International, a provider of insurance software and services, for £276m (€394m) from Montagu Private Equity. This is Towergate’s biggest deal since being set up by chairman Peter Cullum 10 years ago.

Open, which boasts 40% of the UK broker market, was acquired by Montagu and management for £182m from quoted company Misys in March last year for £182m. Current chief executive Phillip Bell will remain with the company and maintain an equity stake in the enlarged business

Towergate is paying 14.7 times earnings before interest, tax, depreciation and amortisation for the business. In its last financial year, Open made Ebitda of £18.8m on sales of £35m.

Bank of Scotland provided the finance for the deal. In addition, Towergate said it has more than £200m to spend on acquisitions and plans to makes “four or five significant acquisitions before the year-end, which will further strengthen Towergate’s position in the SME market space”.

In April, Towergate recruited general insurer Aviva’s UK boss, Patrick Snowball, to become deputy chairman. At the time, Peter Cullum said: “A key focus for Patrick will be the ‘buy and build’ growth of our new business, Towergate Financial Services.”

Chris Spink