B.p Marsh Regulatory News (BPM)

Date: 6 January 2021

On behalf of: B.P. Marsh & Partners PLC ("B.P. Marsh", "the Company" or "the Group")

B.P. Marsh & Partners Plc

Investee Company Update - XPT Group LLC

B.P. Marsh & Partners Plc (AIM: BPM), the specialist investor in early stage financial services businesses, is pleased to announce that its Investee Company, XPT Group LLC ("XPT"), the U.S. based specialty lines insurance distribution company, has successfully completed the acquisition of International Property & Casualty Brokers of Nevada, Inc. ("IPC"). 

IPC is a Managing General Agent and Program Manager specialising in excess and surplus lines insurance, with a particular focus on hired and non-owned auto, which comprises 93% of its business. IPC also offers the wholesale insurance market a variety of complete packages for hard to place risks, including bars and taverns, vacant buildings and mobile home parks. 

This acquisition provides a number of benefits and synergies to XPT.

IPC strengthens XPT's current product offerings, whilst also complementing business already written. IPC brings with it an experienced management team in Tammy and Chris Sunderland, who founded IPC in 1996 and will provide expertise and unique product knowledge in the hired and non-owned auto space, thus further expanding XPT's wholesale distribution network.

B. P. Marsh was a founding investor in XPT in 2017, since when XPT has grown significantly through value-accretive acquisitions. Its Gross Written Premium is now approaching $400m, and its Adjusted EBITDA approached $10m, for the year ending December 2020.

This growth has been supported by investment from Madison Capital Funding LLC ("Madison"), the debt arm of the New York Life Assurance Company, from whom XPT have secured $40m in aggregate financing. Madison took a minority equity stake in the business in September 2019, which at the time was based on an enterprise value of $54m. Since then, B.P. Marsh has released updated valuations as at 31st July 2020, which implied an increased enterprise value of $86.4m for XPT.

The purchase of IPC marks XPT's eighth acquisition over the three years since launch, having completed three acquisitions in 2020, notwithstanding the impact of Covid-19. 

Concerning this latest acquisition, Jeff Heath, a founding partner at XPT stated "For nearly 25 years, Tammy and Chris have worked to develop a niche identity in the Excess and Surplus Lines insurance market. Our modern platform and collaborative culture will allow IPC to expand across the wholesale insurance industry offering brokers complete packages for tough classes of business".

Commenting on this development, B.P. Marsh's Chief Investment Officer and Nominee Director on the Board of XPT, Dan Topping, said "The acquisition of IPC is a continuation of XPT's successful growth strategy of building a solid platform, bringing together both specialty underwriting and wholesale broking operations. B.P. Marsh looks forward to working with XPT in the future as they continue on this growth trajectory."

XPT will be utilising its previously announced debt facility with Madison Capital Funding LLC to acquire IPC.

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About B.P. Marsh & Partners Plc

B.P. Marsh's current portfolio contains eighteen companies. More detailed descriptions of the portfolio can be found at www.bpmarsh.co.uk.

Since formation over 25 years ago, the Company has assembled a management team with considerable experience both in the financial services sector and in managing private equity investments. Many of the directors have worked with each other in previous roles, and all have worked with each other for approaching ten years.

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