Irish Life & Permanent together with the management of Woodchester Investment Brokers have completed the purchase of the group from GE Capital. The price price was not disclosed but is understood to be more than £20 million (€25 million).
Woodchester Investment Brokers is one of the largest independent brokerages operating in the Irish market and also has business operations in Northern Ireland. It has a substantial client base and is particularly strong in the provision of group affinity schemes in the health, pensions and motor insurance sector. The breakdown in shareholding between IL&P and the broker's management is not being disclosed, but it is understood that IL&P will own around 75 per cent while the broker's management will own the remaining shares.
Its clients include members of the two main teacher's unions and one of the nursing unions. The Irish National Teachers Organisation, with 26,000 members and the Association of Secondary Teachers in Ireland, with 15,000 members, have the biggest single group scheme. Woodchester Investment Broker's chairman and chief executive, Mr Mervyn Percival, said yesterday it had received a guarantee from Irish Life & Permanent that it would remain independent in its business operations.
"Irish Life & Permanent has given us absolute guarantees about our ability to act independently in all matters relating to client advice and services, and frankly, this deal would not have been possible if that was not the case."
Meanwhile, Irish Life & Permanent, chief executive, Mr David Went, also stressed it would continue to provide independent advise on a range of products. "While we are committed to respecting the independence of the brokerage we do believe that we can learn from its experience in these areas to improve the service offering in other areas of our business."
Woodchester Investment Brokers was taken over by GE Capital when it purchased the Woodchester group last year, but would have been viewed as being outside GE's core business. It specialises in providing financial advice covering general insurance, life insurance and investment products for affinity groups. It employs 100 people.
It was established by the current chairman and chief executive, Mr Mervyn Percival, who subsequently sold it to Woodchester. He together with two other directors, Mr Michael O'Brien and Mr Robert Power are part of the management team involved in the purchase.
It has net assets of £621,560. Industry sources estimate that the brokerage generates annual premium income of up to £70 million and is highly profitable. The acquisition is part of Irish Life & Permanent's strategy of developing distribution channels to affinity groups. It is particularly keen to develop its branch-based distribution at the moment, just 8 per cent of its products are sold this way.
The group recently sold Irish Life's stake in Irish Intercontinental Bank and Irish Life Finance to the Belgian bank KBC. The group has also negotiated an exit mechanism in relation to its 23.1 per cent shareholding in K&H Bank in Hungary. Its interest will be transferred to KBC through an option arrangement at a minimum price of £27.9 million (€35.4 million). The option will exist for five years and no transfer can take place before May 2001.
