Major tenancy referencing and insurance firms merge in wake of fees ban

Two major suppliers to the lettings industry are merging in the wake of the tenancy fees ban.

Barbon Insurance Group, which trades as HomeLet and Rentshield Direct, and Let Alliance announced the deal this morning.

Operating under the name of Barbon Holdings, the combined businesses will offer tenancy referencing and insurances including rent protection.

They will continue to trade separately under their current brands.

Martin Totty remains as group chief executive of Barbon Holdings and Andy Halstead stays as chief executive at Let Alliance, which also offers a tenancy deposit replacement product.

As part of the deal, Halstead will also become an executive director on the Barbon board, subject to regulatory approval.

Totty would not reveal details of the deal or confirm whether it was an acquisition, saying: “We are merging the two businesses and the shareholders of Let Alliance will become shareholders of Barbon Group. We are unable to disclose financial details of the merger.”

A statement said that the merger comes “at a pivotal time” following the tenancy fees ban “which has challenged the traditional business model”.

Totty said: “Letting agents and their landlords are looking for peace of mind that strategic supply partners deliver quality and value, are financially resilient, well capitalised and with balance sheet strength to meet future liabilities on products and services they sell today where customers may have use of them much later.

“We also recognise that customers can no longer afford the time or resources required in conducting risk assessments and due diligence on the viability of small firms with limited solutions.

“Combining the robust and longstanding Barbon business with the creativity and breadth of product portfolio of Let Alliance – both with deep experience in regulated financial services – creates a scale provider of lettings protection solutions that has the potential to invest and innovate better than if the brands remained independent.”

Halstead said: We have built a very special business at Let Alliance.

“Customers are at the heart of everything we do. Our merger with HomeLet and Rentshield is consistent with our values – it’s all about our customers.

“Letting agents across the UK are working in a tough and challenging market. Letting agents are consolidating and local firms are merging in order to build scale and thrive in the future.

“Strategic partners and suppliers like us need to understand the needs and challenges that letting agents experience and consider how they provide support and solutions.

“The merger allows us to focus all our combined resources on further developing our proposition for customers.

“We are ‘fit for the future’ and have the financial strength to deliver exactly what our customers need.

“The merger gives us access to resources that we could only dream of as an independent and it gives us the scope to carry on as Let Alliance and remain true to our values and customer commitments.”

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14 Comments

  1. Mrlondon52

    No such thing as a merger, Martin and Andy know that. It seems that Homelet have bought Let Alliance. Expect execs from the latter to leave over the next 12 months as costs will have to be cut to justify the merger and increase EBITDA. Best of luck to all involved.

    The only surprise is that this took so long after Nov 2016 when the tenant fees ban was announced.

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    1. Andy Halstead

      How a Merger Works

      A merger is the voluntary fusion of two companies on broadly equal terms into one new legal entity. The firms that agree to merge are roughly equal in terms of size, customers, scale of operations, etc. For this reason, the term “merger of equals” is sometimes used. Acquisitions, unlike mergers, or generally not voluntary and involve one company actively purchasing another.

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    2. robw82

      This is a very archaic and cynical idea of what a merger is Mrlondon. A buy-out is a very different process and having been a part of companies going through both in my career I can attest that they are in no way the same.

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      1. Andy Halstead

        Thanks robw82

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    3. MarcWom83

      It’s Cameron and Clegg

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  2. Lil Bandit

    A lot of management babble going on here to justify this one! Call a spade a spade!

    Having met Andy and spoken about his vision for the company before he didn’t strike me as a man who would sell out like this! But everyone needs to make a buck and its a sign of the times I guess….

     

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    1. Andy Halstead

      If you have met me then you will know that I do not do babble. This is no sell out as you call it, time will prove the case.

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      1. Lil Bandit

        Prove me wrong fellah! Best of luck with the new venture 🙂

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        1. Andy Halstead

          will do

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  3. watchdog13

    Great news Andy.

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    1. Andy Halstead
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  4. GA2000

    Last year Homelet bought Move’m and made promises to the agents? Now Homelet buy Let Alliance which is much bigger and a lot of the staff will know Andy as he used to run Homelet so there’s a lot of opinions. My guess is he will be loyal to his people and it will cause a lot of internal politics when Homelet want it there way as they do. As someone already said, in reality there is no such thing as a merger and someone always has the upper hand. I know Andy thinks he’s answered that point with a dictionary definintion but he hasn’t been made group or joint CEO and he’s used to running his own game and saying and doing what he likes. Maybe the plan is that Andy is CEO in waiting as Homelet have I hear been trying to sell themselves and the management are running out of time and want to leave. Either way there’s no best practise will come of this clash of egos and people will look elsewhere where you can still actually get a more personal service. Somewhere where they’re not spending all their time on trying to make cost savings. Just saying.

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    1. Andy Halstead

      Today’s Meeting Agenda;

      Creating incremental value for customers
      New opportunities for team members
      Innovation and sharing ideas
      Growing our business
      Beating our competitors, without compromise

      Just saying……………

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      1. MarcWom83

        So HomeLet make well over £9mm a year profit. If Let Alliance make the same being the same size then that’s an £18mm per year referencing and insurance giant. In light of all the pressure on agents especially since the fee ban how is this fair? Someone is paying for all this at the end of the day. And now you also have a monopoly. This is not good for the industry imho. 

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