Case Study: Chase Templeton
Buy & Build strategy leads to 80 acquisitions under Palatine’s ownership – Private medical and group risk insurance brokers focusing on the SME and private individual sectors. The Company was founded by Kevin Amphlett in 2002 and had started consolidating the PMI broker sector before Palatine’s investment, undertaking ten acquisitions of smaller brokers. The business provided PMI advice to SMEs and individuals and had over £70m of Annual Premium Income (“API”) and 40,000 policies across 35,000 clients at the time of investment.
Accelerated buy and build opportunity – We invested in Chase Templeton in 2013, supporting the founder, Kevin Amphlett, who, alongside an excellent operational team, sought to capitalise on further lucrative market consolidation in a highly fragmented sector. The team had successfully completed ten acquisitions of smaller brokers before Palatine’s investment. However, the pace of its buy and build strategy had been constrained by having to rely on the founder to raise capital from various sources on an ad-hoc basis.
We were impressed by the historical growth Chase Templeton had achieved and the ability the management team had demonstrated to implement a buy and build strategy and integrate the businesses they had acquired. Scaling the business was supported by its strong relationships with the major insurers who were in favour of further market consolidation. It was clear to the founder that attracting professional investment through private equity was the most efficient way of fuelling his ambitious growth strategy. We were ideally suited to partner with Chase Templeton due to our deep understanding of the financial services sector and our track record in buy and build. Partner Ed Fazakerley and Managing Partner Gary Tipper led the investment, with Ed joining the board as a Non-executive Director.
Organic growth was also an important aspect of the future strategy through further investment in sales and marketing and developing IT systems to improve operational efficiencies and scalability.
Going for growth with added value – Under our ownership, Chase Templeton completed and successfully integrated 80 acquisitions, significantly strengthening its position as one of the leading players in the PMI broker market. We provided an additional £5m to part fund acquisitions and negotiated additional bank funding with HSBC to support growth, enabling the management team to focus on driving the business.
With support from the founder, it was agreed at the time of the deal to bolster the management team, allowing him to step into an Executive Chairman role. We introduced Warren Dickson as the new CEO, who had a long track record in the insurance sector and had previously worked in private equity backed businesses. His focus was to work alongside the Chairman to drive the buy and build strategy. Jamie McGivern, who had previous industry and private equity experience, joined as Finance Director, with his key priority being to further improve the management information systems to allow the business to scale successfully.
Through working closely with the management team, we outlined further operational improvements, including streamlining the due diligence process, enabling acquisitions to be completed efficiently and upgrading the scalability and functionality of IT systems through the development of enhanced compliance and operational reporting required to support rapid growth. Alongside the focus on acquisitive growth, an in-house call centre operation was developed to increase sales from existing channels, which enhanced product cross-selling strategies and customer service benefits.
The Results – We exited the business in 2017 in a sale to Nevada Investments. During our investment the company grew its annual premium income from approximately £90m to £150m in just four years.