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Steel Burrill Jones

Steel Burrill Jones’s share price collapsed in the mid 1990s due to a general de-rating of the insurance broking sector and the company’s poor performance. A public-to-private management buy-out backing an experienced team created an opportunity for Graphite to turn the company round.

SBJ was a mid-sized UK-based insurance broker that was underperforming and undervalued. The business was in the process of changing its strategic focus. Despite this, the company operated in an attractive segment of the UK insurance market and the management team had a clear strategic vision to drive future growth.

Analysis showed that the SBJ was improving and that profits would increase quickly once the costs associated with being a plc were removed and the benefits of management action emerged. There was also the opportunity to sell subsidiary businesses to de-risk the investment and enhance returns post-deal.

Steel Burrill Jones

KEY BUSINESS ACHIEVEMENTS

Sold two subsidiary businesses to third parties for £12 million

Restructured the shareholder base and re-incentivised all senior employees while reducing the cost base

De-leveraged and de-risked the business

Doubled operating profit

70%

Internal Rate of Return

BUSINESS EXIT

In 2001 Steel Burrill Jones was sold to the management team for £33.6 million, generating a multiple of 3.4 times cost and an IRR of 70 per cent.