Helios Underwriting has acquired Advantage DCP, a limited liability member of Lloyd's of London (Lloyd's), subject to consent for change of control from Lloyd's.
Image: Helios acquires Advantage DCP. Photo: Courtesy of patrisyu/FreeDigitalPhotos.net
The consideration for Advantage is between £1.66m and £1.91m, dependent on no deterioration from the current 2017 year of account midpoint forecast of Advantage and the final result of that year. The consideration, which is in cash, will be payable as to £450,000 at completion with the balance paid in tranches in 2019 and 2020.
Information in respect of Advantage
The 2018 underwriting capacity of Advantage is £2.3m (this compares with Helios’s 2018 capacity of £43.0m prior to this acquisition).
The maximum consideration represents a discount of 27% to the independent valuation of £2.6m placed on Advantage by Humphrey’s and approximately £0.6m below the fair value of assets being acquired.
The capacity acquired, together with the capacity Helios expects to retain, is as follows:
| Advantage | Year of Account | ||
| 2016 | 2017 | 2018 | |
| £m | £m | £m | |
| Retained | 3.6 | 3.1 | 2.3 |
| Reinsured | – | – | – |
| Total Capacity | 3.6 | 3.1 | 2.3 |
In addition to the Advantage transaction, Helios is continuing to pursue a number of further Lloyd’s LLV acquisitions in line with its strategy.
Advantage is a limited liability member of Lloyd’s. In the year ended 31 December last year, Advantage made a loss before tax of £0.2m on gross premiums written of £4.3m. Underwriting capacity with an estimated market value of £0.2m has been included in the transaction.
Source: Company Press Release