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.