FMG acquired by Redde plc

Endless announce that agreement has been reached for Redde plc, the leading accident management and legal services Group to acquire FMG, the Huddersfield-based specialist in vehicle incident management and roadside recovery, for approximately £43.2 million in aggregate.  Redde disclosed turnover of £122 million and a profit before tax of £11 million in its most recent results for the six months to 31 December 2014 and partly operates in the same sector as FMG under its subsidiary Total Accident Management Limited.

The previous announcement of the management buyout earlier this year brought FMG to the attention of the sector once again and in particular to Redde.  As a highly complementary and natural strategic buyer for FMG, Redde were keen to promptly progress the acquisition, to enable both businesses to capitalise on the significant opportunities the combined businesses would create.

This acquisition therefore sees private equity house Endless and Nick Brown, who founded the business in 1986, realise their investments much earlier than expected.  The FMG management team, led by Executive Chairman Andrew Cope, will be reinvesting a significant part of their equity proceeds as part of the transaction and will remain on board to help drive the business under Redde’s ownership. Andrew Cope will then continue as a non-executive director, advising on strategy, supporting the Management team and helping to develop the business. 

The deal was signed on the 19th August and is now awaiting final regulatory approvals prior to completion.  Andrew Cope commented:  “This is a truly exciting day in the long history of FMG.  We strongly believe that marrying FMG’s people, knowledge and innovative capacity to Redde's long term investment and commitment to the vehicle claims industry will result in an outstanding service and technical proposition for our customers today, tomorrow and well into the future".

Mathew Deering, Partner at Endless said, “We did not expect to be engaging with strategic buyers of FMG for quite some time yet, but we could not ignore the approach of the Redde board or the recommendation of the management shareholders to accept the offer.  At the same time, this delivers a strong return to our investors. While we regret we will not get to work with the FMG team for longer, we know they are going to an excellent home and wish FMG and Redde every success in future as a combined business.”

The shareholders of FMG were advised by Deloitte, led by Martin Jenkins and David Frith, Squire Patton Boggs, led by Jonathan Jones and Hannah Kendrick and KPMG, led by Steve Heath.