Independent insurance broker Ardonagh Group has reached an agreement to acquire Australia-based PSC Insurance Group, valuing its equity at A$2.25bn ($1.48bn).
Under the signed scheme implementation deed (SID), Ardonagh offered to acquire all the issued ordinary shares in PSC in cash for A$6.19 apiece.
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This price marks a 32.7% premium to PSC’s undisturbed three-month volume-weighted average price and a 27.6% premium to the company’s undisturbed stock close of A$4.85 on 12 March 2024.
PSC, with more than 40 brands and operations across multiple countries, manages more than A$2.59bn in gross written premiums (GWP) and employs 900 staff.
Founded by Paul Dwyer in 2006, the insurer’s international operations span Australia, Bermuda, Hong Kong, Ireland, New Zealand, the UK and Vietnam.
Dwyer will now become part of Ardonagh’s senior management team.
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By GlobalDataArdonagh plans to merge PSC’s Australian and New Zealand operations with its local unit Envest, creating an insurance distribution platform with A$3.3bn in annual GWP.
Envest CEO Greg Mullins will oversee the merged operations in Australia and New Zealand.
PSC’s UK operations will be integrated into Ardonagh Specialty and Ardonagh Advisory, bolstering the group’s operations in the UK’s wholesale and retail broking sectors.
Certain PSC directors and managers will reinvest around 26% of their PSC shares into Ardonagh.
The PSC board has unanimously supported the deal and recommended shareholders vote in its favour in the absence of a better offer.
Ardonagh Group CEO David Ross said: “The acquisition, which has secured the unanimous recommendation of PSC’s board, is a significant milestone in the global growth of Ardonagh and underlines our strong commitment to the markets we serve.
“PSC’s journey and values align with our own and its portfolio of highly complementary businesses provides an abundance of opportunity to strengthen our positions in Australia, wholesale and specialty markets.”
PSC chairman Paul Dwyer said: “This transaction recognises the quality and strength of PSC’s people and business that has developed over the last 18 years. We believe this transaction maximises value for PSC shareholders while also providing an excellent platform for growth for PSC employees and clients.”
This move follows Ardonagh’s initial foray into the Australian market with the acquisition of Resilium Insurance Broking in 2021 and the subsequent purchase of Envest in 2023.
Ardonagh said it has actively expanded its Australian presence, with Envest completing more than 30 acquisitions and growing its GWP to more than A$2.1bn.
The acquisition of PSC is subject to customary closing conditions and regulatory approvals.
