| Stirling Cooke Brown Holdings Limited | |||
| Proposed Ticker: | SCBH | Victoria Hall, Third Floor, 11 Victoria Street | |
| Exchange: | NASDAQ-National Market | Hamilton, BERMU | |
| Industry: | Financial (SIC Code 6411) | 4412957556 | |
| # of Employees: | 296 | ||
| Type of Shares: | Ordinary Shares | Filing Date: | 8/6/97 | |
| U.S. Shares Filed: | 0 | Filing Price: | - | |
| Non-U.S. Shares Filed: | 0 | Offering Amount: | $50,000,000 | |
| Primary Shares: | 0 | Expenses: | - | |
| Secondary Shares: | 0 | Shares Out After: |
| Manager | Tier | Phone |
| Goldman, Sachs & Co. | Lead Manager | (212) 902-5959 |
| Dillon, Read & Co. Inc. | Co-manager | (212) 906-7523 |
| Issuer's Law Firm: | Foley & Lardner |
| Bank's Law Firm: | Fried, Frank, Harris, Shriver & Jacobson |
| Auditor: | KPMG Peat Marwick |
| Registrar/Transfer Agent: | Firstar Bank Milwaukee, N.A. |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/97 | 6/30/97 | ||
| Revenue: | $46.84 | $31.02 | $21.80 | Assets: | $343.02 |
| Net Income: | $10.29 | $6.18 | $5.15 | Curr Assets: | |
| EPS: | $1.24 | $0.75 | $0.63 | Liabilities: | $301.34 |
| Prior EPS: | $1.31 | Curr Liabilities: | |||
| Cash Flow/Oper: | $14.91 | Equity: | $41.68 | ||
| Cash Flow/Fin: | $13.52 | Cash: | $32.77 | ||
| Cash Flow/Inv: | -$20.41 | ||||
| Business Description |
| The company provides risk management services and products predominantly to U.S. based small to mid-sized businesses seeking cost effective alternatives to traditional workers compensation insurance. The Company believes, based upon published industry reports and its own experience, that alternative market workers' compensation products comprised at least $16.4 billion in 1996, or approximately 39% of the estimated $42.4 billion total market for workers' compensation insurance in the U.S. that year. In recent years, the Company has applied its integrated risk transfer approach to the development of insurance programs for other SPECIALTY CASUALTY LINES. The Company has historically experienced strong growth in revenues and earnings despite the current prolonged SOFT INSURANCE MARKET. The success of the Company's risk management services and products has led to an increase in the Company's net income from $2.6 million in 1993 to $10.3 million in 1996, representing a compound annual growth rate of 57.5%. The Company's revenues are predominantly fee based, as the Company earns risk management fees for providing services and products to insureds, insurers and reinsurers. In 1996, 2.2% of the Company's total revenues were derived from risk management fees including agency and brokerage fees and commissions, management and administration fees and other non-risk bearing activities. |
| Competition |
| The business of providing risk management services and products to the workers' compensation and property and casualty insurance markets is highly competitive. The Company competes with providers of traditional insurance coverage and with other providers of alternative market services (including domestic and foreign insurance companies, reinsurers, insurance brokers, captive insurance companies, rent-a-captives, self-insurance plans, risk retention groups, state funds, assigned risk pools and other risk-financing mechanisms). Many of the Company's competitors have significantly greater financial resources, longer operating histories and better financial ratings and offer a broader line of insurance products than the Company. The Company believes the key factors to effectively compete in the risk management market are price, the ability to tailor programs to the needs of the insured and the ability to rapidly develop new solutions to address changing market needs. The Company believes that its services and products are competitively priced, and that its combination of MGA, insurance and reinsurance services and products enables it to rapidly develop tailored programs and act as a single source provider of risk management services and products.Realm is rated B+ (Very Good) by A.M. Best Company and in certain circumstances may be at a competitive disadvantage to insurance carriers with higher ratings. The Company's MGAs also represent carriers with higher ratings from A.M. Best Company, ensuring that the Company's MGAs are not negatively impacted in circumstances where Realm is not selected as insurance carrier due to its rating. |
| Business Plan |
| The company believes that growth potential exists in its markets which will provide opportunities to increase fee-based revenues, net premiums earned and net investment income. To capitalize on these opportunities, the company has established the following strategic priorities which the company believes will allow it to maintain and enhance its position as a leading provider of alternatives to traditional wrokers' compensation insurance. Key elements of the company's strategy are: (I) Increase Market Penetration and Extend Agency Network, (ii) Expand Current Insurance Operations, (iii) Expand Product Offerings Through Existing Distribution Network, (iv) Expand and Develop Program Business, (v) Increase Reinsurance Brokering Revenue and (vi) Selectively Pursue Acquisitions. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to provide additional capital to the company's wholly owned insurance subsidiary, Realm and for general corporate purposes which could include acquisitions of general insurance agencies and books of insurance business. |
| Name of Shareholder | % Owned Before | % Owned After |
| The Goldman Sachs Group, L.P. | 34.00% | |
| Nicholas Brown | 13.50% | |
| Penelope Atteline Cooke | 12.20% | |
| Nicholas Mark Cooke | 8.60% | |
| George William Jones | 6.70% | |
| Jacques Georges Sacy | 6.60% |
| Officer Name | Title | Age |
| Nicholas Mark Cooke | Chairman, President, Chief Executive Officer and Director | 40 |
| George W. Jones | Chief Financia Officer and Director | 43 |
| Nicholas Brown | Director; Managing Director of Stirling Cooke Brown Insurance Brokers Limited and Stirling Cooke Brown Reinsurance Brokers Limited | 39 |