London 6th July 2004 - Royal London Private Equity (RLPE) announces the completion of the management buy out of Axiom Consulting for US$40 million. RLPE is the sole investor in the transaction, providing the capital to fund Axiom’s growth as well as the purchase consideration.  Debt for the transaction has been provided by The Royal Bank of Scotland.

Axiom is a leading provider of insurance run-off administration and insurance services, managing over US$2.5 billion of insurance liabilities. The company operates four business units: reinsurance; accounting; claims consulting and investigatory services. The core team was established in the early 1990's at Alexander Howden, becoming a part of Aon through acquisitions of Alexander Howden in 1997 and from the Hampden Group in 2001.

Axiom generates an annual turnover in excess of US$36 million and has 220 employees in London, Tokyo, Sydney and New York. The investment by RLPE provides Axiom with the financial strength to pursue its growth strategy to build on its current successes in the risk industry and to allow Axiom to pursue balance sheet opportunities in the run-off market.

Axiom’s management will take a minority stake in the business.  Joining the board are Axiom’s CEO Vince Wooding, RLPE's Duncan Johnson and John Trueman, who will join as non-executive chairman. The Finance Director is Peter Clarke.

Commenting on the deal, RLPE director Duncan Johnson said, "Axiom impressed us with the depth and breadth of its services and its strong track record in the insurance services industry. With an increasing demand for run-off management skills across the industry, Axiom has in place strong foundations to support future growth. This is an ideal partnership for RLPE - the size and scope of the business presents an ideal fit with our investment goals."

Vince Wooding, CEO of Axiom, said, “The partnership with RLPE provides us with the backing and independence we need to take advantage of opportunities within a growth market and invest for future development of the business, particularly in the pursuit of finality transactions. Aon has provided the support to establish Axiom as a market leading business and we welcome their continued support as we move to the next stage in our development.”

Francis Marjoribanks, CFO of Aon Limited, commented: “Axiom’s MBO is consistent with our global strategy of focusing on our core areas of expertise: insurance broking, risk management and human capital consulting. We are pleased to have developed Axiom into their current position as a market leader and wish them every success with the continued development of their business in the future.”       

About Royal London Private Equity

In April 2003 RLPE announced the first closing of its first limited partnership fund and has subsequently held a final closing, such that total commitments now amount to over £75m. Investors in the fund include Royal London Mutual Insurance Society, clients of Morley Fund Managers, Scottish Widows Investment Partnership, Britannic Asset Management and Martin Currie along with other institutional and private individual investors.

RLPE’s investment strategy is to target companies valued between £10 million and £75 million in the support services, financial services, leisure, and information technology services sectors.

RLPE’s corporate finance advisers in this deal were Fox-Pitt, Kelton and legal advisers were Addleshaw Goddard.
 

About Axiom Consulting

Axiom Consulting Limited is a leader in the field of international claims consulting practice, representing more than 250 third party clients worldwide, focusing on accounting, claims consulting, special investigations, claims and reinsurance portfolio management and exit strategies for discontinued business and run-off. Axiom is an amalgam of three businesses which were acquired by Aon over the past 20 years. The core team was formed in the early 1990s in Alexander Howden which was subsequently acquired by Aon in 1997. The most recent addition to the group was the acquisition in 2001 of two businesses from the Hampden Group of companies, which provided accounting and run-off management services.

Axiom’s corporate finance advisers in this deal were Europa Partners Limited and legal advisers were Travers Smith Braithwaite.

About Aon

Aon Corporation (www.aon.com) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. The company employs approximately 53,000 professionals in its 600 offices in more than 120 countries.  Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

Hines Associates Limited ("HAL") is acting for Aon Limited (“Aon”) and no one else in relation to the sale of Axiom and will not be responsible to anyone other than Aon for providing the protections afforded to clients of HAL nor for providing advice in relation to the contents of this announcement. HAL is authorised and regulated by the Financial Services Authority (www.hinesassociates.com).

Aon Limited is authorised and regulated by the Financial Services Authority in respect of insurance mediation activities only.