When HGGC announced in 2016 that it was funding the Davies Group, little was known about the deal. Financial analysts were left speculating about the possibility of further funding and even a merger. However, as the years went by, things have since come to the fore. It can now be said authoritatively that the funding involved acquisition of a majority investment stake in the company. The deal saw the managers of Davies retain their job although they would have to change their working strategy.
Using their networks
Because of this agreement, HGGC was going to leverage on the system already created by Davies which is based in London. This company has been delivering third-party administration services to insurance intermediaries. They also offer specialist technical services. Because of their existing customer base, they press more than 170,000 claims every year which translates to about £1.2 billion in annual claims. These claims include casualty, motor, property, and other classes of niche insurance.
A worthy deal
Although the details of the sponsorship were initially scanty, it later emerged through an announcement from Davies showing that they were thrilled to partner with HGGC. The company said that they hoped that this new frontier would present them with better business opportunities. They were aiming at growing their business through a new model that has prompted the signing of the deal. Specifically, the company wanted to add a few more services to their portfolio including specialty BPO services and international expansion. These two services were going to add to the already ongoing M&A strategy.
A statement from the HGGC team, after the completion of the signing of a deal, indicated that this was not an ordinary deal. Co-founder Rich Lawson said that Davies was not a third-party insurance administrator to ignore. He pointed out that they have been at the forefront of the provision of innovative services, and strategy that they also use.
While pointing out that Davies invests heavily in new technology, HGGC said that there would be no better time for a deal between the two companies. He also noted that they have been leading when it comes to new applications, an indication that they are the company of the future.