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Steadfast Group to purchase insurance businesses
Posted on Tuesday, 05 December 2017 01:52
Steadfast Group is acquiring general insurance broker Whitbread Associates and property insurance underwriter Axis Underwriting Services in a deal worth AUD 95.00 million (USD 72.24 million) as part of expansion plans.
Completion is expected to occur on 8th December 2017.
To part fund the transaction, the Australian Securities Exchange-listed company is raising AUD 100.00 million, representing 4.4 per cent of its enlarged capital, from institutional investors via a stock placement.
It has appointed JP Morgan and Macquarie Group as co-lead managers, bookrunners and underwriters to the capital increase.
Steadfast Group is billed as the largest insurance broking network in Australia and New Zealand with more than 1,200 offices.
It specialises in services such as life and reinsurance broking, underwriting, specialised legal practices and premium funding.
The firm serves companies from various industries, including the hospitality, food and beverages, healthcare, education, mining and construction sectors.
Steadfast Group posted revenue of AUD 504.10 million in the 12 months ended 30th June 2017, up 7.2 per cent on the AUD 470.20 million recorded in the previous year.
Underlying earnings before interest, tax and amortisation totalled AUD 143.30 million, compared to AUD 129.60 million in fiscal 2016.
Commenting on the deal, the purchaser’s chief executive Robert Kelly said: “As a long-standing member of the Steadfast network, we have a close, long-term relationship with WIB [Whitbread Insurance Group] which we look forward to building upon following this transaction.”
He also expects Axis Underwriting Services to “complement our existing agency portfolio”.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 45 deals targeting Australian insurance carriers and companies engaged in related activities announced since the beginning of this year.
The most valuable of these is AIA’s ongoing acquisition of Commonwealth Bank of Australia's life insurance units worth around AUD 3.80 billion.
© Zephus Ltd