Ardonagh’s Joe Conway on playing the M&A long game

Speaking to Insurance Post at the British Insurance Brokers Association conference last week, Conway said in the current M&A world, there are “a lot of vendors looking for options”.

He said: “They want credible options; they want their funds. To that extent, we’re busy.”

You can’t buy everyone.

Joe Conway

Building a wider ecosystem

However, as Conway explains: “You can’t buy everyone.”

But he said he doesn’t want to be approached by someone looking to sell, who is willing to share confidential information, then just say ‘no thanks, and see you later’.

“That's a little bit cold,” he said.

So if he can, Conway said he will introduce a vendor to someone else he knows is looking to buy, if he cannot do a deal with them directly.

“I work on the basis that if a vendor reached out and says, ‘I want to sell my business. What can you do? I want a solution.’ If I can't actually provide a solution directly, what I'll try and do is give them something.

“It could be an introduction to one of the Bravo brokers because Bravo brokers are acquisitive. And what I’ll say to the vendor is: ‘I can't actually make this work, but I can facilitate an introduction to somebody who could make it work. Would you like me to?’

“If they give me permission at that point, then I'll introduce them and then leave them to it, effectively.”

Conway said this gives Ardonagh a nice “win-win”. “You help build a broader, wider ecosystem,” he said.

But while he said he would like this to open up an opportunity for a more direct deal with Ardonagh later down the line, it is not something he banks on.

“I'd like to have an opportunity [to do a deal later]. But equally, if I can help Bravo, it helps a wider Ardonagh family anyway.

“If it leads to a deal with Ardonagh down the line, absolutely brilliant, but I'm not going to bank on that.”

Conway said that while he has mainly stuck to introducing vendors to Bravo brokers, he would not rule out introducing vendors to a potential match outside of the Ardonagh Group.

“I'm literally just doing work trying to help a vendor achieve what they want, and where I can’t actually do it myself, then maybe support the Bravo Network.”

Conway said this mentality stuck with him from his 18 years at Aviva.

“I was part of the team that set up the Aviva succession offering, which kind of has the same model at its heart. So, if I've had exposure to something in the M&A world, why wouldn’t you pair somebody if you can?”

“My default setting is ‘I want to do the deal direct’. It's just sometimes for whatever reason, you can't quite make it work, or you can't get what the vendor absolutely wants.”

What does Ardonagh want?

Ardonagh is a hive of activity when it comes to M&A, with each of the platforms mostly buying up brands. Ardonagh Advisory is no different.

Last month, Advisory announced its first buy of the year in Pace Ward, with chief customer officer Phil Bayles signalling more to come in the next “weeks and months”.

Those businesses coming in had to fulfil a particular criteria, according to Conway.

“A really good cultural fit is what I'm after,” he said.

“If you get the right business, and the culture is there, the people are there, you think ‘you know what, these two could come together nicely,’ and then you could facilitate things.”

But it is the nature of the business that gives Ardonagh, and Conway, a good view of whether any potential acquisition would be a good fit.

“The specialty side definitely helps, because if there is a good set of capabilities that we don't currently possess, we can bring our capabilities to them, and they can bring capabilities to us. We can learn from them; they can learn from us. That's an obvious attraction.”

But Conway said how Ardonagh wants to bring entrepreneurial people into the business through these acquisitions, and build them up to eventually hold influential positions within the wider group.

“If you could find a broker that has a good cultural fit, has a good, capable management team with brilliant people, we can facilitate all sorts of career opportunities in the long term,” he said.

“We've got a number of cases where people have come in reasonably junior positions and gone on to have pretty key roles within our business. That's a lovely legacy to leave behind.”

One example of this is Ian Donaldson. He founded Autonet back in 1998, and in 2017, it was brought into the Ardonagh Group. Now, Donaldson is chief executive of Ardonagh’s Retail platform, and is even touted to lead the potential merger with Markerstudy.

Not paying silly money

While Ardonagh is always looking at opportunities to buy, Conway said it is not going to “throw money at anything that moves.”

“We are disciplined in our thinking,” he said. “We won't pay silly money for something that doesn't work. If something is a brilliant strategic fit for one reason or another, and we know we need to do something, we will do something. What we won't do is just throw money at anything that moves. That's not the right way.

“My mantra is about quality, about trust, about doing things properly.

“In terms of that [M&A] long game, I do think it is about building trust, building relationships, building presence and doing things the right way for people. Then, if they want to approach you, or if you want to approach them, you know they’ll be warm and receptive.”