Clearwater International advised SFS Europe, France’s largest specialist producer of construction insurance, on its acquisition by CBL Corporation (credit and financial risk insurer from New Zealand).
The acquisition also includes IMS Expert Europe SA (IMS), SFS’ claims management operation. The transaction is valued at €94m. Approximately €11.4m of the purchase price will be paid over the next two years, subject to adjustment depending on the financial performance of SFS and IMS.
CBL began working with SFS in 2005 and the strong relationship built over the last 11 years and entrepreneurial business skills of its main shareholder, Mr. Patrice Gilles has resulted in SFS becoming the largest construction risk specialist in France and writing the largest proportion of CBL’s French construction-sector insurance products, mainly Dommages Ouvrage and Decennial Liability. The acquisition is also expected to bring additional strategic opportunities for CBL.
SFS and IMS together had a net revenue of €41m in 2015 and operating earnings of €8.2m on a normalised basis. The acquisition is expected to be accretive in the first full year of CBL ownership.
CBL will maintain continuity in SFS and IMS by retaining the executive management on existing terms. Mr. Antoine Guiguet, the Executive Chairman of SFS and current shareholder of SFS and IMS, will keep his position and reinvest a portion of the purchase price in a significant minority shareholding of approximately 26% in the CBL subsidiary that acquired SFS and IMS.
Mr. Gérard Marichy will remain Managing Director of IMS upon acquisition, and reinvest a portion of the purchase price into the CBL acquiring subsidiary of approximately 3%.
The Clearwater International team, led by Managing Partner,Thomas Gaucher, was composed of Nicolas Saint-Pierre, Director, and Meryem Idrissi Kaitouni, Senior Analyst, advised SFS Europe on this transaction.
Patrice Gilles, Fondateur, SFS Europe commented: CBL has been an important partner for SFS over the years, and together we have developped a strong positioning on the market. Following my decision to withdraw from the business, CBL positioned itself naturally as an ideal strategic partner to reinforce our structure and allow SFS to continue its development with Antoine Guiguet, President of SFS Europe, and M. Gérard Marichy, Administrative Delegate of IMS Expert Europe. My future role as SFS Ambassador will allow me to continue to bring support to the group in a non executive capacity. I am thrilled that we have now reached the accomplishment of a full partnership between SFS and CBL.
Antoine Guiguet, President, SFS Europe added: We have worked in close collaboration with CBL for many years now, and this merger opens numerous new perspectives. The recent acquisition of one of the highest ratings A- (Excellent), given by A.M. Best at CBL Insurance Limited, emphasises the solidity and reliability of the group, as well as the opportunity to strengthen SFS and CBL’s positioning in the French construction insurance market. We are looking forward to working together and developping new and innovative offers in response to the constant evolution of construction key players’ needs.
Thomas Gaucher, Managing Partner, Clearwater International said: We are very proud to have led this international consolidation in the construction insurance sector. SFS’ impressive growth has triggered a lot of interest among financial investors, even though in the end, a well-known southern hemisphere insurance company, with clear-cut growth strategy, won the support of SFS shareholders and managers.