GRP looking to “double in size” in next three years: Margrett

UK broker consolidator Global Risk Partners (GRP) is looking to use the capital support of its new private equity backer – Searchlight Capital Partners – to fuel further M&A that could see the firm “double in size” within the next three years, its co-founder and non-executive chairman David Margrett has said.

Speaking to The Insurer following the completion of Searchlight’s acquisition of a majority stake in GRP, Margrett said the expansive consolidator remained focused on M&A with a “healthy” pipeline of deals and more than 12 currently going through due diligence.

The GRP co-founder said the business was now targeting “significant” growth with GRP looking to “double in size” within the next three years – a feat Margrett said is “eminently doable”.

“When we were looking to bring a new partner in, we said that we wanted to double the size of the business in the next three years. We think that’s eminently doable,” explained Margrett.

“There are lots of opportunities for us to deploy the capital that we have. Having built out the central and regional teams we now have a lot of resources – M&A is our fourth core business,” he added.

The former Willis chairman noted that GRP’s M&A pipeline – which remains focused on MGA and broking businesses, portfolios and teams which have niche, non-commoditised, specialty business – remains “unweakened” by the market movements driven by the coronavirus.

“The plan is to accelerate [M&A] when conditions allow,” he said.

GRP operates an ‘owner-driver’ model whereby the management of acquired businesses retain an equity stake in their businesses and work with GRP to source further acquisitions. 

The Insurer understands that over 200 GRP Group members staff have been delivered a pay-out as result of the Searchlight acquisition.

The deal – which completed last week – came after The Insurer revealed in August that GRP was set to launch a sale process to take advantage of the high prices paid for UK brokers.

As previously reported, the firm retained consultancy firm Deloitte to advise on preparing the business for a partial sale and engaged insurance-specialist investment bank Evercore to lead the process.

The move, which was first announced in February, sees founders Margrett and Peter Cullum retain a minority stake in the business with managing director Mike Bruce taking the group CEO role.

Margrett acts as non-executive chairman and Cullum non-executive director of the group holding company.

“One of the reasons we  were pleased to partner with Searchlight was that they bring more reinsurance and technological expertise. We’re also at the very beginning of the fund rather than the end – this means there’s plenty of room for further development.” Margrett added.

“All credit to Searchlight Capital for being as impatient as we were to get the deal done,” he continued.

Founded in 2013, GRP has made 59 acquisitions since launch and now controls gross written premium approaching £800mn.

It has also focussed investment on specialist retail brokers and on niche MGAs – including Camberford, Usure and Plum Underwriting – where total premium volume of the division now exceeds £130m GWP.

GRP reported 84 percent growth in turnover to £112.1.9mn in 2019, an increase of 48 percent on the previous year and a run rate EBITDA of £50mn, a 42 percent increase on the prior year.