Merger of Hyperion & RK Harrison Approved by Boards, Shareholders

Hyperion Insurance Group Limited and RK Harrison Holdings Limited announced the signing of the terms of agreement for the merger of the two London-based businesses, following approval by the two companies’ respective boards and shareholders.

The transaction remains subject to regulatory approval and it is envisaged that completion will occur during the second quarter of 2015.

Under the terms of the agreement Hyperion will acquire 100 percent of the share capital of RKH. The combined group will be 70 percent owned by its employees, with Hyperion’s external shareholder, General Atlantic, remaining in place with its shareholding of 30 percent.

Management expects to fund the acquisition with a combination of debt and equity. The newly merged business will have projected annual revenues approaching £400 million ($615.8 million)* and earnings before interest, taxes, depreciation and amortization (EBITDA) of £100 million ($153.9 million) with close to 3,000 employees across 121 offices in 37 countries.

“The combined business will provide the marketplace with a viable, independent alternative, while sustaining an entrepreneurial culture and bespoke ethos that is unique in the insurance industry,” Hyperion said in a statement.

Hyperion will remain the parent company of the combined group, with David Howden continuing as CEO. Dominic Collins will be appointed executive chairman of Hyperion.

Collins will also lead Howden UK Group, the combined group’s UK broking business, which will comprise: Howden UK, to be headed by Adrian Colosso; RKH Specialty, to be led by Barnaby Rugge-Price; and RKH Reinsurance, to be led by Elliot Richardson.

Howden will lead Howden International, the combined group’s international broking businesses, comprising operations in Europe, Asia, Middle East and India, Latin America and Iberia.

Shane Doyle will continue to lead DUAL, the combined group’s specialist managing general agent which will also comprise Aqua, RKH’s MGA business, which will continue to be led by Graham Elliott.

Howden, Hyperion’s CEO, said: “This is a landmark moment for both Hyperion and RKH and an achievement of which we can rightly be proud. Both companies are outstanding in their own right, but they will be stronger together creating the world’s largest majority employee-owned insurance group. In a rapidly changing industry where specialism, distribution and scale matter more and more, we will be even better placed to play a leading role in our sector. We are hugely excited to be combining our entrepreneurial cultures, complementary business mix and extensive UK and international footprint to create an even better proposition for our clients, employees and shareholders.”

Collins, RKH’s chairman, added: “This is a transformational merger that brings together our two companies to create a significantly enhanced platform that drives innovation with a balanced mix of direct, specialty and underwriting activities. The combined capabilities, geographies and knowledge will mean we can even better serve our clients while remaining the employer of choice for the industry’s very best talent.”

Hyperion is being advised by J.P. Morgan Cazenove and RKH is being advised by Evercore.

($1 = £1.54 on March 3, 2015)