Australia’s Steadfast attracts A$7.7B Buyout approach from US investors
Steadfast Group is assessing a non-binding takeover proposal from a consortium led by Amwins Group and Dragoneer Investment Group. The A$8.00-per-share offer values the Australian insurance broker network at about A$7.7 billion and reflects continued merger and acquisition activity across the global insurance distribution sector.
Key Highlights
- Steadfast received a non-binding A$8.00-per-share takeover proposal.
- Amwins and Dragoneer value the company at approximately A$7.7 billion.
- Enterprise value of the proposed transaction is about A$8.3 billion.
- Steadfast operates across Australia, New Zealand, Singapore and the US.
- Gross written premium across its network exceeded A$18 billion.
Steadfast Group is considering a takeover proposal that would value the Australian insurance broking company at roughly A$7.7 billion, following a consortium led by the U.S.-based Amwins Group and investment firm Dragoneer Investment Group that put forward a non-binding offer of A$8.00 per share in cash.
Valuing the business at about A$8.3 billion on an enterprise value basis, including debt, the offer, while non-binding, has led Steadfast to provide the consortium with restricted due diligence access while its board assesses the approach.
The offer puts the Australian insurance distribution major at the centre of a potential cross-border transaction connecting the Australian and U.S. Insurance markets, where Amwins and Dragoneer are respectively a significant player and investor.
The proposal came on the back of Steadfast's steady profit growth. Its latest full-year results shows underlying revenues of A$1.84 billion and underlying EBITA of A$649.3 million, as the company delivered gross written premium of more than A$18 billion across its network.
Operating more than 400 insurance broker businesses and underwriting agencies across Australia, and extending to New Zealand, Singapore and the U.S., Steadfast boasts a wide presence in multiple insurance markets viabroking, underwriting,and related services.
The consortium's offer represents a premium of around 29% to Steadfast's closing price before the offer became public.
The proposal adds to an active M&A landscape within the global insurance broking market, where large distributors and investors continue to snap up targets to expand reach and distribute networks.
For Australian businesses, the deal marks another international investment into domestic financial services firms, while for U.S. Investors, it's a chance to acquire access to one of the largest insurance broker networks throughout the Australasia region.
There's no guarantee that discussions will conclude in a binding agreement and transaction, Steadfast added, with the company undertaking due diligence through advisers and continuing discussions with the consortium.
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