Cullum, who this year was ranked number one in MT’s annual list of Britain’s Top 100 Entrepreneurs, is reportedly talking to private-equity firm Candover about the sale of a 25% stake in Towergate, the specialist insurance business he founded a decade ago and built into one of the UK’s most successful companies. And with an expected price tag of £3bn, that’s going to leave Cullum sitting on a rather nice pile of cash – hopefully before that pesky Alistair Darling ramps up the capital gains tax rate.
Towergate has refused to confirm the reports, although it did admit that it was in discussions about the ‘capital requirements of the business’. It would be an unusual step for Candover to take a minority holding, but given the current state of the debt markets private-equity groups are having to be a bit more flexible. And it’s got a long history with Cullum, having backed one of his earlier acquisitions – if the deal goes through it apparently wants to float Towergate in two or three years’ time.
Cullum has made his fortune by exploiting a fairly unexciting but very lucrative niche in the insurance market – specialist cover for everything from Army military equipment to racing drivers. And he’s also expanded aggressively – Towergate has increased turnover by more than 500% in the last 5 years, thanks largely to Cullum buying over 100 specialist brokers.
Despite this, he still owns about 56% of Towergate, according to MT’s Top 100 Entrepreneurs compiler (and all-round wealth guru) Philip Beresford – so the sale would still leave him as the biggest shareholder in the business. At 57 years old, you’d think he might be tempted to slow down a bit; to take private equity’s cash and head to Barbados to enjoy a well-earned retirement. But after deciding against a full sale last summer, the decision to sell a partial stake suggests he has no intention of kicking back with a pina colada just yet. In fact, he even said recently that he was ‘entering the most exciting phase of his career.’ We don’t know where he gets the energy from.
With an estimated worth of about £1.7bn, it’s not as though Cullum’s short of cash to pay the bills. But the partial exit would allow him to provide some sizeable rewards for the rest of his management team – before the Chancellor starts creaming off the extra 8% in April. It’s no wonder that everyone seems to like him so much...
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