Overview

In November 2007 we backed the £18m buyout of Enrich (previously called Gissings Advisory Services), the sixth business we have backed in the financial services sector. It provides consultancy advice on flexible benefits, private medical insurance, life assurance, permanent health insurance, occupational health and employee wellness to a number of FTSE 100 and FTSE 250 businesses.

Deal Features

We identified Enrich as a high quality operator in a growing marketplace. It is one of a small number of operators in the employee benefits consulting market to develop a more sophisticated business model. This comprises the provision of a range of consulting and other services alongside product broking.

At the time of the deal, the flexible benefits market was forecast to grow by 16 per cent annually for the next 5 years. This will mostly be driven by the SME market where Enrich is particularly strong and represents excellent potential for geographic growth. The distribution market remains fragmented, with over 100 corporate intermediaries in PMI alone. Consolidation is likely to realise cost synergies and opportunities for revenue synergies between client bases.

Business Description

Enrich employs 57 people and is headquartered on Moorgate in London. It provides a range of employee benefits services to corporates, enhancing staff retention and wellbeing. In terms of market share, Enrich is the fifth largest UK corporate risk distributor and is in the top five UK corporate healthcare intermediaries with a blue chip client base. Enrich has 400 clients, ranging from SMEs to major corporates, including eight FTSE 100 clients and 17 FTSE 250 clients.

Demand for flexible employee benefits systems is growing rapidly, with recent survey evidence revealing that a significant proportion of UK SMEs are considering the adoption of flexible benefits in the near future.

The market for private medical insurance (PMI) distributed through corporate schemes was estimated at c. £1.6 billion of premiums in 2006, with group life and income protection products estimated to be worth c. £1.5 billion of premiums in 2006. Both markets are relatively mature, with premiums estimated to be growing at c. 5 per cent per annum.

Enrich's perspective

Commenting on the deal Andrew Kilbey, Managing Director of Enrich, said: “Dunedin stood out as a strong financial partner. The team has a good track record in and considerable understanding of the financial services industry which, coupled with their underwriting of the debt package in a difficult credit market, enhanced deliverability for all parties.”