Ardonagh Group announces landmark A$2.3bn acquisition of PSC Insurance Group to boost global insurance services
The Ardonagh Group, one of the world’s premier independent insurance broking platforms, has entered into a definitive agreement to acquire all issued ordinary shares of PSC Insurance Group Limited (ASX:PSI) for A$6.19 per share. This acquisition, valued at an implied equity value of A$2.256 billion and an enterprise value of A$2.429 billion, marks a significant milestone in the global expansion of Ardonagh’s insurance services.
Strategic Expansion in Australia and New Zealand
Post-acquisition, Ardonagh plans to merge PSC’s operations in Australia and New Zealand with Envest Pty Ltd, which Ardonagh acquired in February 2023. This merger will create one of Australia’s largest privately-owned insurance distribution platforms, managing A$3.3 billion in gross written premium annually. Greg Mullins, CEO of Envest, will oversee the combined operations, enhancing the Group’s footprint in the APAC region.
Integration and Growth in the UK Market
Furthering its reach, Ardonagh will integrate PSC’s UK operations into Ardonagh Specialty and Ardonagh Advisory, bolstering its status as a leading entity in UK wholesale and retail broking. This strategic consolidation aims to leverage synergies between the organizations to enhance service delivery and market reach.
Funding and Financial Strategy
The acquisition will be financed through a balanced mix of approximately 50% equity—primarily from existing shareholders Madison Dearborn Partners and HPS Investment Partners—and 50% debt, encompassing existing and new facilities. This financial structure is projected to maintain leverage neutrality on a pro forma basis.
Diversified Operations and Global Reach
PSC, established in 2006, has grown into a diversified insurance services group with more than 40 trading brands and operations across multiple countries, including the United Kingdom, Ireland, Hong Kong, Vietnam, New Zealand, and Bermuda. The company employs 900 people and manages over A$2.59 billion in global gross written premium.
Leadership and Vision for the Future
David Ross, CEO of The Ardonagh Group, emphasized the alignment of PSC’s journey and values with Ardonagh’s ethos of independence and scale, noting the acquisition as a pivotal advancement in Ardonagh’s global growth strategy. Paul Dwyer, Chairman of PSC, highlighted the deal as a value-maximizing opportunity for PSC’s shareholders, employees, and clients. Meanwhile, Greg Mullins and other PSC leaders expressed optimism about the potential for growth and innovation in the insurance market through this partnership.
The Scheme Implementation Deed (SID) is subject to customary regulatory approvals. The leadership teams are committed to a smooth integration process that prioritizes client service and maximizes the synergistic potential of the combined entities.
This acquisition by The Ardonagh Group not only represents a significant consolidation within the global insurance market but also reflects the strategic foresight of both Ardonagh and PSC. By merging their complementary strengths, they are poised to create a robust platform capable of driving innovation and growth in the insurance industry worldwide.