Former Aquis-quoted company Jigsaw Insurance Services is recommending a 204p a share cash offer from insurance business consolidator PIB Group Ltd. There could also be additional consideration of 14p a share depending on completion accounts. That values the bid at up to £24.1m.
Breakdown, motor and pet markets are the focus of the specialist insurance business. Adding it to the Buyer’s Group, which is owned by PIB, should enhance the development of the enlarged group. Buyer’s Group is involved in motor insurance, but Jigsaw will take it into new areas. It already has revenues of £200m.
Harrogate-based Jigsaw was formerly known as NCI Vehicle Rescue and it left what was then known as ISDX in February 2015, so it still comes under the Takeover Panel rules. Turnover and profit have grown since the departure, but there has been no market to trade the shares. This offer is at a higher price than at any time when the shares were traded.
In the year to March 2022, turnover increased from £12.1m to £14.2m, although that includes a £1.64m exceptional item relating to the decision by HMRC to treat the breakdown product as exempt from VAT. The breakdown business grew its income, but insurance commissions were lower.
Higher costs, partly related to the exceptional, meant that pre-tax profit fell from £2.37m to £1.7m. There was £7.2m in the bank, including £3.36m held in insurer trust money accounts.
The bid values Jigsaw at less than 15 times 2021-22 post-tax profit. At the time of the annual report, management expected 2022-23 results to be in line with last year.