Independent insurance broker Jardine Lloyd Thompson (JLT) is to sell its 26.2% stake in Milestone, the holding company of French broker Siaci St Honoré, to Ardian, formerly known as Axa Private Equity.
JLT said that the announcement followed the decision by Siaci St Honoré's shareholders to either exit or reduce their holdings and to seek a new majority investor that could finance the French broker's expansion plans. Ardian is a leading France-based private investment company.
JLT said that it had a "deep and long-standing specialty focused trading relationship that goes back over 20 years" The broker said that it would continue to work with Siaci St Honoré on a significant number of joint ventures in areas that include Energy, Construction, Marine & Cargo and Credit & Political Risk. "Siaci St Honoré will remain the exclusive partner of the JLT International Network in France alongside JLT's other fully owned, associate and network partners in Europe and around the world", JLT said.
The transaction will generate an exceptional gain of about £21m,. Net proceeds of £82.1m will be payable in cash and used to repay borrowings.
Milestone's pre-tax profit last year was £24m, with its contribution to JLT coming to £5m.
The deal will need to follow French law and be approved by Siaci St Honoré's works council, by antitrust authorities, and is conditional on the signing of a definitive sale agreement. The transaction is expected to close by the end of April 2015.
JLT chief executive Dominic Burke said that his company was "pleased that we have been able to secure a very attractive price for our stake, while ensuring a continued commercial and strategic relationship with Siaci St Honoré and its people to the benefit of all our clients and people".
Siaci merged with St Honoré, in which JLT at the time owned a 20% stake, in 2007. In 2003 it reported a 31% stake in Siaci. Siaci underwent a restructuring in 2001, under which JLT's stake fell from 37% to 31%.