London-based underwriting agency European Insurance Services Ltd has been acquired by New Zealand’s largest credit insurer Contractors Bonding Limited (CBL), with backing from Clydesdale Bank Corporate & Structured Finance.
Clydesdale worked closely with its sister bank, Bank of New Zealand, to provide senior debt funding for the acquisition, which will help CBL almost treble its income and further strengthen its operation in Europe.
European Insurance Services specialises in providing residential home warranty insurance in France and Spain, writing more than €22 million of premiums per annum and employing 45 staff across its three offices in Tunbridge Wells, Paris and Madrid.
CBL, established in 1973, is the largest and oldest provider of credit surety and financial risk in New Zealand. CBL offers a wide range of credit insurance, financial surety and builder’s risk related products through an international distribution network that CBL has developed over the last 10 years.
The deal will help CBL increase its annual premium income from $40 million in 2010 to more than $100 million this financial year. It will also add to CBL’s existing network of support offices in London, Copenhagen, Kuala Lumpur and Atlanta and add further strength to its management team, especially in relation to its European operation.
“Bank of New Zealand’s link with Clydesdale Bank was key to us securing the cross-border bank funding necessary for this transaction. Both banks worked with us, and our other advisors, in partnership on the transaction in order to ensure that the acquisition ran smoothly,” said Carden Mulholland, Chief Financial Officer of CBL.
The UK banking team was led by John Holm, director with Clydesdale Bank Corporate & Structured Finance in London and a specialist in the insurance market. He said: “CBL and European Insurance Services Ltd are both well run, specialist insurance operations and we are delighted to assist CBL in its UK acquisition strategy.
“Clydesdale continues to grow its presence in the UK insurance sector, an area where we see ongoing growth and opportunities.”