HNW loss adjuster group Criterion bought by Charles Taylor
Charles Taylor Adjusting has purchased the Criterion group of loss adjusters, claims managers and surveyors, expecting to benefit from its new acquisition's specialisation in serving high-net-worth (HNW) customers, which will offer predictable streams of income to balance those of its own core business lines. CTA intends to retain "its market leading position in the aviation, energy and marine sectors", the company said. The Criterion group focuses on the UK's HNW property, fine art and antiques insurance sectors.

Charles Taylor Adjusting Ltd (CTA), subsidiary of Charles Taylor plc, has acquired Criterion Adjusters Ltd, Criterion Surveyors Ltd and Criterion Claims Management Ltd (together, Criterion) a group of specialist loss adjusting, surveying and claims management businesses, for a maximum consideration of £13.1m. Criterion focuses on the UK high net worth (HNW) property, fine art and antiques insurance sectors. Charles Taylor paid £5.3m in cash on completion to acquire 100% of the equity of the three Criterion businesses. A further payment of £1.0m has been made to shareholders to reflect the net cash position of the company and to enable them to settle directors’ loans owing to Criterion.

Deferred consideration of up to £7.8m will be paid, based on business performance over the three years following completion, of which 50% will be paid annually over the three years, with the remaining 50% held back and released on the fifth anniversary of completion.

The initial consideration has been funded by a £5m increase in facilities with RBS and HSBC. As of March 31st 2017 the combined gross assets of Criterion were £2.8m. Criterion generated aggregated revenue of £4.3m and profit before tax of £1.8m in the year to March 31st 2017.

Charles Taylor said that the transaction marked “an important step forward in delivering CTA’s business model and strategy”, and that CTA was diversifying its business into closely related profitable and stable property and casualty (P&C) loss adjusting sectors, such as the HNW market, “while retaining its market leading position in the aviation, energy and marine sectors”. The company said that the strategy was designed to increase regular, repeatable income streams for CTA, while reducing the working capital requirements over time.

CTA expects to benefit from business referrals from Criterion to its other adjusting teams globally and to the wider Group’s other businesses such as Charles Taylor TPA and CEGA. Criterion will continue to trade under its existing name. The business will be led by its current management and its clients will continue to be served by their existing teams. Criterion’s Managing Director, Chris Monks, and Operations Director, James Long, will continue in their existing, respective roles.

Charles Taylor group CEO David Marock said that the acquisition marked “another important step forward in our strategy to grow by developing new professional service business lines, which are closely-related to our core business, both organically and through carefully targeted acquisitions and investments.”

CTA chief executive Damian Ely said that “the acquisition of Criterion is part of our strategy to diversify our loss adjusting business into closely related specialist P&C markets. HNW loss adjusting provides steady revenues which will help to balance the less predictable income streams from our other business lines. The nature of the work also means that Criterion’s working capital requirements are lower than is normal in our existing aviation, energy and marine markets.”