Steadfast has announced plans to buy Calliden Group, making the broking behemoth one of the country’s largest agency groups.
Steadfast Managing Director and CEO Robert Kelly announced the deal this morning, while updating the market on its strong financial results for the year.
Under the plan, Steadfast will pay $105.4 million in cash and dividends for the listed insurer before immediately selling the general insurance operations to Munich Re, while retaining most of the underwriting agencies.
Munich Holdings of Australasia will acquire the general insurance operations of Calliden Insurance Limited, as well as Calliden Group’s Business Package and Commercial agency operations.
Steadfast will retain ownership of ARGIS Farmpack, Builders’ Warranty, Calliden Home, Dawesmotor, IUA business interruption, Mansions and Accident and Health and 50% of strata specialist QUS.
The transaction is expected to take place by the end of the year and will take Steadfast’s annual gross written premium from underwriting agencies to around $310 million.
“Calliden’s eight agencies complement our diverse mix of niche and specialised agencies,” Kelly says.
“On completion of the acquisition, Steadfast will become one of the largest agency groups in Australia with annual GWP of around $300 million.
“Currently over half of Calliden’s agencies’ insurance sales are generated through Steadfast Network Brokers, which places us in a strong position to enhance their value. We will also endeavour to develop and strengthen their alliances with other distribution networks and non-aligned brokers as well as insurers.”
Kelly says the deal will also lead to a stronger partnership between Steadfast and Munich Re, giving the network’s brokers greater access to Munich Re products.
Meanwhile, Steadfast also announced that its financial performance has exceeded its pre-IPO forecast, with gross written premium up 4.7%.
“We exceeded Prospectus forecasts despite the insurance market softening towards the end of the financial year,” Kelly says.
“Our pro-forma EBITA (pre Corporate Office expenses) increased 15.3% compared to FY13.
“This strong performance was helped by solid growth in merger and acquisition fees and higher profit margins for equity brokers.”
Kelly says that broker hubs have now been finalised in every state in the country.