Pro Global sells majority of business to focus on supporting Asta

Pro Global Insurance Solutions has agreed to sell Pro Services, its outsourcing and consulting business which represents the majority of its trading activities, to focus on supporting the growth of Asta, third party managing agency at Lloyd's.

Pro Services will be sold to a newly formed company backed by Acuity Investments, a private equity firm that previously invested in Canopius at Lloyd's, for £8.3 million.

The sale will mean that the company’s only trading remaining activity will be through its 30 percent investment in Asta Capital, which owns a number of companies including Asta Managing Agency, a third party managing agent at Lloyd's.

Pro Global Insurance said that after considering the capital investment requirements of Pro Services, selling the business and focussing on Asta is in the best interests of shareholders.

It said it will now focus on supporting the growth of Asta.

The sale is conditional upon approval of the company's shareholders at a general meeting.

Acuity Investments was founded by Adam Barron and Toby Franklin. It has made a number of investments in the insurance and specialty lending sectors previously including in Canopius at Lloyd's.

It is expected that Artur Niemczewski and Andrew Donnelly, the company's chief executive and finance director respectively, will transfer with Pro Services.

Pro Global Insurance said it will likely change its name following the deal but a new name has not yet been selected.

Tim Carroll, chairman of Pro Global Insurance, said: "Asta has performed very well since its acquisition in 2011, and we look forward to focussing on growing Asta following the sale of Pro Services. We wish the employees of Pro Services every success in the future and are grateful for the tremendous progress they have made over the last two years to make Pro Services a great standalone business."

Artur Niemczewski, CEO of Pro Global Insurance, said: "Pro Services' priority in 2017 is the continued implementation of its "Client First" strategy with the same single-minded commitment to client service.

“Core to this strategy is the provision of market leading solutions to the industry, and the acquisition by Acuity will provide Pro Services with the investment necessary to pursue this objective. The Pro Services team is very excited about the prospects, long term stability and financial strength this transaction will bring to us."

Pro Services made a £0.9 million profit in 2015 from revenues of some £26.5 million and £0.2 million in the six months to June 2016 from revenues of £13.3 million.

The company said the pro forma net asset value of Pro Services, as included in the consolidated balance sheet at 30 June 2016 was £7.6 million. Goodwill amounting to £5.1m included within the consolidated total net assets of the company and its subsidiaries relates entirely to Pro Services and will be written off.

The new company will pay £8.3 million for 100 percent of the shares in five wholly owned subsidiaries: Pro Insurance Solutions; Pro IS; Stripe Global Services; Chiltington Holdings; Chiltington International Holding; and various subsidiaries of these companies. This amount is subject to adjustment for movement in working capital based on the balance sheet as at 30 September 2016. The impact of the sale on the company's balance sheet as at 30 June 2016 is a reduction of £4.4 million.