Brokers speculate that a house specialising in “turnaround” could buy the broker which is believed to be on the market for £400m.
Personal lines broker Swinton is on the market and sources believe the most likely buyer could come from the private equity sector.
It is thought that the business is for sale for around £400m.
A recent alert by consultancy IMAS advised that Swinton was one of a large number of deals “on the block”.
IMAS founder Olly Laughton-Scott commented: “It is possibly a private equity deal because it needs to be sorted out.
“If they [private equity] find a strong manager there might be an opportunity there.”
High
One anonymous broker felt such a price for Swinton was too high.
He added: “The longer they take to sell the smaller it is getting.”
In February the business announced that it was set to close 40 branches with 268 redundancies.
This followed a restructure last year which, as revealed by Insurance Age, proposed 900 redundancies as the business reviewed the size and shape of its branch network. That September the broker also unveiled a two year plan with the target of becoming the largest digital broker in the UK.
In 2016 the firm announced the closure of 130 branches across the country.
The anonymous broker continued: “I do not think there will be a huge amount of interest because they will be trying to turnaround something that is going backwards.”
Reasonable
A different un-named broker agreed that “it could be a private equity play”.
He put £400m as a “reasonable figure” and suggested that the business had previously been on the market.
The unnamed broker commented: “They [Swinton] were definitely stripping it down and trying to sell the components a couple of years ago.
“Then they pulled away.”
The broker stated that a year later the rumour was the Ardonagh Group was interested in buying at least part of Swinton.
He continued: “I heard that Ardonagh were looking at the whole piece but that got ‘poo-pooed’ by the guys at Ardonagh.”
Match
Indeed Swinton could be a good match for Ardonagh considering its base in Manchester – Ardonagh also already has Carole Nash in Altrincham and Autonet in Stoke.
The unnamed broker speculated that the Swinton business would fit into Autonet.
However he noted the rumour had since gone off the boil but also added: “It is probably still there. It became hot news for a small time and then went quiet.
“It is probably still there in the background.”
Ardonagh declined to comment when approached by Insurance Age.
Turnaround
However, another anonymous expert agreed with Laughton-Scott that Swinton was most likely to find a home with private equity with his pick being a “turnaround specialist”.
He explained: “It needs a lot of work doing to it. I do not think another broker will buy it.
“As a business it is probably at the nadir of its transformation plan. It will take a least a couple of years to get it back into growth.”
He added: “There are lots of very good people there. I hope it finds a good home and has a future.”
Swinton’s most recent set of results saw profits fall £4.4m to £11.5m in 2016 as the business pointed to a number of one-off charges relating to “modernising”.
Swinton has been approached for comment.
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