Gut feel ends PIS/Newpark deal
Insurance advisory group Newpark has called off an equity deal with Professional Investment Services (PIS) just months after a previous plan to merge it with the Australian firm's New Zealand operations fell over.
Thursday, May 21st 2009, 7:42AM
by David Chaplin
Darren Gannon, Newpark head, said the most-recent proposal, which would have seen PIS Australia take a 25% stake in Newpark, was ditched three weeks ago.
"It was a gut feeling really," Gannon said. "Although I'm turning down a substantial amount of money I felt that in this current environment we're better off operating solely as a risk group."
Winton Aslin, PIS Australasia head of risk, confirmed the Newpark purchase was cancelled after the two parties "couldn't quite agree on the end price".
"We felt our offer was genuine in light of the market circumstances and the current multiples being offered for these kinds of businesses," Aslin said. "We thought the price was fair."
Both Aslin and Gannon said the "door is still open" to further talks between the two groups.
Newpark and PIS Australian orginally agreed to the part-ownership deal this March after an earlier plan to merge it completely with PIS New Zealand, for a rumoured price of $6 million, collapsed late last year.
Gannon said Newpark was now free to focus on growing internally. The group recently hired former Asteron executive, Barry Read, as general manager to lead the growth.
According to Gannon, Newpark was also pressing ahead with its adviser equity plan, which should be operational by the end of June.
"We've also got a couple of important strategic alliances to finalise," he said.
Aslin said PIS remained committed to the New Zealand market and would press ahead with building its financial planning accountant referral model as well as its insurance aggregator business.
"We've had good growth in New Zealand over the last 12 months," he said. "We've had inflows into the financial planning network and the insurance aggregator business is growing."
Aslin said about 65 insurance advisers have signed up to the PIS risk aggregator group.
Newpark now boasted over 200 insurance advisory businesses in its network, Gannon said.
"That's all from referrals too," he said. "We don't have BDMs out there recruiting, we rely on goodwill."
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