Australia’s biggest insurance broking network Steadfast will buy broker and strata-focused underwriting agency Whitbread Insurance Group for $95 million.
Family run Whitbread Insurance Group comprises two business – Whitbread Insurance Brokers and Axis Underwriting Services.
Managing Director & CEO of the network Robert Kelly said, “Steadfast Group was the natural acquirer of Whitbread Insurance Group with an excellent strategic and cultural alignment. It is a well-established business with a long track record of financial performance and a strong reputation in the market.
“As a long standing member of the Steadfast Network, we have a close, long-term relationship with WIB which we look forward to building upon following this transaction. Axis will complement our existing agency portfolio. It has performed strongly while showing pricing and underwriting discipline to build long-term relationships in their market.”
Whitbread was founded in 1978 by John Whitbread and is focused on the small-to-medium enterprise general insurance market with offices in Melbourne, Sydney and Brisbane. Axis was established in 1999 as a specialist underwriting agency focusing on niche areas of property and liability.
Chair of Whitbread Angela Whitbread, speaking on behalf of the Whitbread family, said, “We are delighted that Steadfast Group has acquired Whitbread given our many years of working together. Our family is pleased to transition ownership to Steadfast which ensures the longevity of the company started by my father nearly 40 years ago and secures the future of our staff and client relationships.”
The acquisition price of $95 million will be funded through a $100 million institutional equity raising and a $25 million Share Purchase Plan. The broking operation will join Steadfast Group’s existing portfolio of equity-owned brokers, while Axis will become the 25th member of the Steadfast Underwriting Agencies portfolio. At the start of the month Steadfast requested that its shares remain in a trading halt while the institutional placement is conducted and will likely remain in that stage till the conclusion of the placement.
Following the Placement and SPP, Steadfast Group is expected to have $120 million of capacity to pursue further growth opportunities. J.P. Morgan Australia and Macquarie Capital (Australia ) are acting as joint lead managers, bookrunners and underwriters for the institutional placement.