CLARK Thomson, one of Scotland’s biggest independent insurance brokers, has been snapped up by a subsidiary of global financial services giant Marsh amid continuing consolidation in the UK insurance sector.

The privately-owned firm, which has more than 200 employees in nine offices across Scotland, has been acquired by Jelf, an insurance, risk management and employee benefits specialist. The two parties say the deal will pave the way for further expansion of the Scottish business.

It also signals an exit for the Clark and Donnachie families, long-standing shareholders of Perth-based Clark Thomson, who believed the firm had reached its growth potential in its current format. Clark Thomson, which provides insurance to firms in agriculture, renewables, food and drink and retail, was established in 1965.

Information on the value of the deal, or on any windfalls received by shareholders, were not disclosed. According to its most recent accounts at Companies House, Clark Thomson increased turnover to

£11.2 million in the year ended March 31, 2017, from £9.95m the year before. However, it went from making a profit of £658,692 in the 2016 year to a loss of £2.76m. That came as operating expenses climbed to nearly £14m from £9.3m as a result of writing off historic intra-group loans.

Ben Bailey, managing director of Clark Thomson, said the merger was not motivated by cost cutting, declaring it will allow the firm to expand its geographical reach around Scotland while augmenting its range of services.

He also said the Clark Thomson office footprint was complementary to Jelf’s. Glasgow is the only location were they have an overlapping presence, though Mr Bailey said the Scottish firm’s office in the city is small.

Clark Thomson’s other offices are in Perth, Dundee, Inverness, Kirkwall, Oban, Elgin and Thurso, whereas Jelf’s seven offices in Scotland include Edinburgh, Aberdeen, Bellshill, Dumbarton, Forfar and Stirling.

Talks over combining the two Glasgow offices and investing further in the city are under way.

Commenting on the rationale of the deal, Mr Bailey said: “We were looking to expand the value of services that we could bring to clients. We’ve historically focused very much on the mid-market sector insurance provision, but we wanted some new areas we could bring to our clients. Getting together with Jelf in the way that we are deals with the geography element, bringing further and more advisory services for the benefit of our clients.”

Asked whether a desire by the Clark and Donnachie families to exit the business had been a factor, Mr Bailey said: “I think that they felt, along with all other shareholders, that it had been taken as far is it could in the existing format. It needed fresh capital interest in the business.”

Jelf chief executive Phil Barton said the families were “absolutely committed to ensuring that the business was sold to the right buyer”.

He noted: “We are a business that is only interested in buying businesses that can make us better, either through extending our geographical reach or bringing new capabilities to bear. We’re not a business that is going to buy a business today,

arbitrage it and sell it on a little further down the track in order to make a financial return. We are buying businesses to complete our strategy to be the best, most trusted advisor in the UK. That allows the families to sell the business knowing they are selling it into a long-term home.”

Mr Barton added: “The similarities in our cultures are incredible.”

While the two businesses will be combined into a single unit, led by Mr Bailey alongside a management team drawn from the two organisations, the Clark Thomson name will be retained.

Mr Barton said: “There’s a huge amount of value in the Clark Thomson name. It has a great heritage, it has a great reputation for looking after its clients. We want to retain the Clark Thomson name while adding to it the power and market influence capabilities of the Jelf brand. We have no intention of subsuming the Clark Thomson name in any way.”

The Clark Thomson deal follows the acquisition by Marsh of Aberdeen-based Central Insurance Services in 2014. Central, which specialised in the oil and gas, financial services, construction and agriculture sectors, will now become part of the wide Jelf network in Scotland.

Jelf has nearly 3,000 staff in more than 75 locations around the UK.