CBL announces acquisition of European Insurance Services Limited

Contractors Bonding Limited (CBL), the largest provider of credit surety and financial risk in New Zealand, today announced it has acquired London based insurance underwriting agency European Insurance Services Limited (EISL), for an undisclosed multi-million dollar sum.

EISL specialises in providing Residential Builders Warranty Insurance in France and Spain, writing more than €22 million of premiums per annum and employing 45 staff across its three offices in Tunbridge Wells (UK), Paris (France) and Madrid (Spain).

According to Peter Harris, CEO of CBL, “Our acquisition of EISL will increase CBL’s Group annual premium income from $40 million in 2010 to more than $100 million this financial year. The acquisition is an important part of our strategic plan and will help increase CBL’s Group annual revenues to $250 million, with operating profits of $30 million, over the next five years.

“EISL will bring depth and scale to our business, and will add to our network of existing support offices in Kuala Lumpur, Copenhagen, London and Atlanta. CBL now earns its revenue from over 30 countries in the world, and the expertise and knowledge of EISL’s executives will also add further strength to our current management team, especially in relation to our European operations.

“In addition to the expected financial gains that will result from this acquisition for CBL, we also envisage our existing Builders Warranty Insurance business partners in New Zealand, France and Mexico to benefit from this acquisition as they will be able to draw on the additional expertise and experienced underwriting talent brought to the table by EISL.”

Alan Clarke, Chairman of EISL added, “The acquisition by CBL has been well received by our staff and brokers. CBL and EISL have a similar culture of winning what they set out to achieve, and we look forward to being part of the CBL Group. On a personal level, I know that the EISL executive team is certainly looking forward to spending more time in New Zealand.”

CBL also praised its financial backers BNZ in New Zealand and its sister bank in the UK (both owned by National Australia Bank), and its advisers in the transaction, Bancorp.

“BNZ’s international ability was key to us securing the cross-border bank funding necessary for this transaction. The Bank worked with us, and our other advisors, in partnership on the transaction in order to ensure that the acquisition ran smoothly,” said Carden Mulholland, Chief Financial Officer of CBL.

Bank funding for the transaction was arranged in Euro, to match expected business receipts from France and Spain, with CBL also increasing its capital by NZ$9 million.

Tony Hannon Director of Bancorp said “Finding high quality funding to fund insurance transactions is never easy outside the more traditional markets of London, Hong Kong and New York. We were pleased with the support from BNZ who understood the strong cash-flows of the businesses involved in this transaction and the high quality, non-traditional insurance model that CBL has developed.”

Fortune Manning of New Zealand and CMS Cameron McKenna of London were CBL’s legal advisers in the transaction.