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Warburg Pincus and Temasek Take Nearly £600M Debt Package From Arcmont to Finance SRG Preempt

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Arcmont is set to provide a £590 million debt package to finance Warburg Pincus and Temasek’s preemption of British insurance broker Specialist Risk Group, or SRG, during the auction process, sources told Reorg.

The debt package comprises about a £400 million unitranche, levering the company at around 7x, plus a £150 million acquisition facility and a £40 million RCF, sources said.

It supports a purchase price of around £1.1 billion, or 18x the company’s EBITDA of £60 million, sources said.

Incumbent lender Ares initially supported the bid alongside Arcmont but is not participating in the deal, sources said.

Warburg Pincus and Temasek announced the acquisition of SRG from HGGC May 21. SRG’s management team will continue to hold a ‘significant stake’ in the business, according to a press release.

In 2021, HGGC acquired SRG from Pollen Street Capital, in a deal that included a unitranche facility, PIK note and acquisition capital facility from Ares, and a super senior RCF from ING, as reported. The business was originally created by Pollen Street through the acquisition of Miles Smith in 2018 and The Underwriting Exchange in 2019.

Arcmont, Ares and Warburg Pincus declined to comment. Temasek did not respond to a request for comment by the time of publication.

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