In a move set to shake up the insurance landscape, Australia’s PSC Insurance is poised to be acquired by the UK’s Ardonagh Group in a deal valued at a hefty A$2.26 billion ($1.51 billion). This acquisition, announced by PSC on Wednesday, marks a significant step for Ardonagh, enhancing its foothold in the region’s insurance market.
PSC Insurance, renowned for its diversified range of insurance services under over 40 trading brands, is undergoing this transformation as policy prices steadily climb. Ardonagh’s offer of A$6.19 in cash per PSC share represents a 7.8% premium on PSC’s last closing price of A$5.74 on Wednesday, underscoring the strategic importance of this acquisition to Ardonagh.
The all-cash premium price in the deal highlights the significance of PSC to Ardonagh in expanding its footprint in the Australian market. Ardonagh intends to merge PSC’s Australia and New Zealand operations with Envest Pty Ltd, an entity it acquired in February last year. The combined entity, under the leadership of Envest CEO Greg Mullins, is poised to become one of Australia’s largest privately owned insurance distribution platforms, handling a substantial A$3.3 billion in gross written premium annually.
With the proposed merged entity, PSC will be in a more competitive shape to ride on the new growth cycle in the insurance sector. PSC’s board has already given its seal of approval to the deal, which carries an enterprise value of A$2.43 billion, inclusive of debt.
Ardonagh has outlined its funding strategy, with 50% of the deal to be financed by existing shareholders Madison Dearborn Partners and HPS Investment Partners, and the remaining through existing and new debt. The acquisition is slated for completion in late September, marking a pivotal moment in both PSC’s and Ardonagh’s journeys.
(Source: Insurance Business America | Reinsurance News | Ardonagh Press Release)
