Steadfast Group has tapped JPMorgan and UBS to raise up to $310m by way of a placement and share purchase plan to buy Sure Insurance.
Shares are being sold in a book build for the $280m placement and $30m share purchase plan, with a floor price at $5.06, a 6.5 per cent discount to the closing share price of $5.41 on November 15.
Steadfast told the market that it would buy 70 per cent of Combined Agency Group, trading as Sure Insurance, a rapidly growing underwriting agency providing home and contents insurance in regional Queensland.
It will outlay $148.8m upfront plus earn out payments in the next two financial years based on 10.3 times earnings before interest and tax.
It also has a Put and Call option arrangement for up to two thirds of the remaining 30 per cent equity interest with an exercise date between September and October 2026.
The deal is set to be earnings accretive in the first year.
The acquisition is consistent with Steadfast’s growth strategy where it pursues highly attractive acquisitions that are complimentary to its existing portfolio.
Steadfast upgraded its 2024 financial year guidance range to $520m to $530m EBITDA for this financial year from $500m to $510m.
Steadfast was established in 1996 and is the largest general insurance broking network and the largest underwriting agency group in Australasia.
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