UK insurance broker Howden agreed to buy M&A protection specialis
t Atlantic Group as the City firm presses ahead with a rapid expansion in the key US market.
Atlantic Group’s founders — Richard French, Joe O’Brien and D
avid Haigh — will reinvest a “substantial portion” of their equity to become shareholders of Howden, accordin
g to a statement Monday. The deal values Atlantic Group, which was founded in 2017 and has over 110 staffers, at m
ore than $500 million, a person familiar with the matter said, asking not
to be identified as the information is private.
New York-based Atlantic helps companies and private equity f
irms buy protection against breaches of warranties as well as ta
x and credit risks related to M&A in the US. Howden is alre
ady the largest transaction liability insurance broker outside the country.
The combination aims to create a “global powerhouse” th
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at will seek to win business from the “world’s leading private eq
uity houses and their portfolio companies,” Howden Founder a
nd Chief Executive Officer David Howden said in the statement. Bar
clays Plc acted as financial adviser to Howden, while Piper Sandler advised Atlantic Group.
Take-up of M&A protection has grown over the past decade, a perio
d that saw rampant dealmaking by buyo
ut firms, fueled by low interest rates.
The protection can help sellers receive more of their proceeds upfront, while offering buyers recourse.
The deal for Atlantic is Howden’s latest push to boost its US presence as it looks to rival major global brokers Mar
sh & McLennan Cos., Aon Plc, Arthur J. Gallagher & Co. and Willis Towers Watson Plc.
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To gain a foothold in the US retail broking market, Howden held talks to acquire Risk Strategies early last year before Ho
wden eventually opted to launch its US retail operations without a majo
r acquisition, hiring hundreds of staffers from rivals across the country.