Nexus CEO bullish on ‘transformational growth’ as BP Marsh ups stake

Specialist investor  BP Marsh & Partners has acquired an additional 2.49 percent stake in  Nexus Underwriting Management as the managing general agent (MGA) has secured a new £70 million banking facility from Barings to fund new acquisitions as it enters the next phase of its “transformational growth”.

Nexus plans to use the new banking facility in two ways, with £50 million being used to refinance existing debt and meet upcoming deferred consideration payments, with the balance available for new acquisitions.

As part of its fundraising, Nexus has repaid in full the £4 million loan facility with BP Marsh over two years in advance, alongside the £40 million loan facility with HPS Investment Partners.

Nexus raised these facilities with HPS and BP Marsh in 2017 when its EBITDA was £5 million, and the equity value of its business was £75 million. For the 2021 financial year, Nexus is forecasting underlying EBITDA of £19 million and has an internal equity value of £238 million.

Alongside the fundraising, BP Marsh has acquired a further 100,000 shares in Nexus for £4 million from Ian Whistondale, a founding non-management shareholder.

The Group’s fully diluted shareholding in Nexus has increased to 19.18 percent, with BP Marsh becoming the largest individual shareholder in Nexus, with management and employees continuing to own over 50 percent of the business.

Colin Thompson (pictured), Nexus founder and group CEO, said: “This debt facility provides Nexus with the ability to satisfy our long-term growth aspirations, increasing both Gross Written Premium and EBITDA via organic growth and from new acquisitions.”

Dan Topping, chief investment officer of the company, added: “With this successful debt raising Nexus is well set for its next phase of transformational growth, taking the business to $1billion of Gross Written Premium Income, and we are looking forward to working with them to further deliver significant equity value uplift.

“The Group first acquired a 5% in shareholding in Nexus in 2014, seeing this as a unique opportunity to structure a transaction whereby we would not only be able to increase our shareholding to our more usual percentage, but also to support and assist the management team at Nexus to grow the business significantly. As evidenced by their performance, management have achieved a tremendous amount and a considerable ongoing return for the Company.”

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