Cobra Holdings has recently released an announcement stating that it has sold a percentage of its assets of its commercial insurance broking operations in both Alton and Caterham for £8.2 million to Aston Scott Group subsidiary ASG Risk Management.
The business insurance broking operation sale is comprised of a £5 million cash payment, the next two years’ worth of cash earn out estimated to raise an additional £2.7 million, and a freehold property payment of £490,000. Cobra remarked that the sale was due to be finalised by November 30 of this year and was aiming to use the proceeds as part of its debt reduction strategy.
While the sale will result in a reduction of operating profits for the company, Cobra claimed that the new deal would lead to the ability to further invest in core business measures. The two sold business liability insurance broking firms will continue supporting the core wholesale offerings of their former owner.
Cobra offered confirmation that the businesses being acquired by ASG Risk Management provided both retail and commercial insurance broking and had been operated autonomously within Cobra, which led to them not being required to produce individual audited accounts. However, Cobra did add that management account had both pre-tax profits and net commission revenues for both subsidiaries for the 2010-2011 financial year as being £678,000 and 4.25 million respectively, excluding the £483,000 worth of book value for the freehold property.
Group chief executive for Cobra, Stephen Burrows, remarked that the firm decided to sell the divisions to Aston Scott Group after exhaustive research that indicated ASG would continue evolving both subsidiaries and provide further career progression and provide stability for its staff.