Steadfast plans $100m Whitbread bid

Australia ‘s largest general insurance broker Steadfast Insurance is expected to announce an acquisition of Whitbread Insurance Brokers today in a deal worth about $100 million.

It is understood the insurance broker will raise about $100m via a placement using investment banks JPMorgan and Macquarie.

The group, which has 360 brokers, is in a trading halt pending an announcement.

Whitbread is a family-run business that operates in Sydney, Melbourne and Brisbane with over 80 staff.

Steadfast is known to be highly acquisitive.

Shares last traded at $2.93.

When it listed in 2013, Steadfast’s shares were sold at $1.15. It was the second largest float of the year and at that time was worth about $700m.

It has been described as the nation’s largest insurance broking network by gross written premiums.

For the 2017 financial year it posted a $66m net profit, up 9.8 per cent on the previous corresponding period, with record gross written premiums of $5 billion.

It expects to make between $70m and $75m this financial year.

The investors that initially backed Steadfast when it listed included Perpetual, Colonial, AMP and Caledonia Investments.

In a separate development, Quadrant Private Equity’s mining services company CQMS Razer is believed to have been withdrawn from the market after it hired Gresham earlier this year to find a buyer.

The business was among those in mining services that suffered from the resources industry downturn, but since that time the sector has been back in favour, leading some to question what may have prompted the move.

One possibility is that the buyout firm had lofty expectations on price after gaining a track record of securing major windfalls on asset sales — namely its Real Pet Food Company, which it sold a few months ago for $1 billion.

It has also secured a dazzling price for Icon Group and is expected to soon be in for another windfall, with many betting it will appoint advisers for a float or sale of its gym business around March next year.