Australia’s AUB Group has entered into a binding agreement to purchase UK insurance broker Tysers for A$880 million (US$615.2 million) from private equity firm Odyssey Investment Partners.
AUB Group recently raised A$350 million (US$244.7 million) from existing institutional investors and new investors, which will fund the transaction, along with A$176 million (US$123.1 million) in shares and debt of A$675 million (US$471.9 million). There is a potential for additional consideration of up to A$176 million ($123.1 million), which may be payable two years post completion, depending on achievement of growth targets.
The deal is expected to complete in the first quarter of 2023, subject to regulatory approvals.
Separately, AUB entered into a non-binding agreement with Australian intermediary PSC Insurance to form a 50/50 joint venture in which PSC will buy a 50% stake in Tysers’ UK retail arm – after AUB’s acquisition of Tysers is completed.
“Tysers will provide AUB with a direct platform to the Lloyd’s market, assisting AUB to continue our growth while enhancing our value proposition to our brokers and customers,” commented AUB Group CEO Mike Emmett.
AUB describes the deal as “transformative,” in part, because Tysers is a leading independent Lloyd’s broker writing A$3.6 billion (US$2.5 billion) of gross written premiums. Further, Tysers provides AUB with underlying 30% earnings per share accretion on a pro forma calendar year 2022 basis.
Tysers operates as a wholesale and retail broker as well as with a substantial number of delegated authorities.
“AUB is the perfect partner to allow Tysers to continue to be a great place to work, carry on with the firm’s proud history and support our future growth ambitions. The strategic and cultural alignment is clear, and we are excited about executing on future opportunities together,” said Clive Buesnel, CEO of Tysers.
Founded in 1820, London-based Tysers is currently ranked as the 12th largest broker in the UK and is the sixth largest broker placing business into Lloyd’s of London. It places approximately $3 billion of premium into the global markets annually and employs 1,100 people.
Sydney-headquartered AUB Group, which comprises insurance brokers and underwriting agencies, operates in more than 500 locations across Australia and New Zealand. More than 3,000 team members work with 850,000 clients to place more than A$4.0 billion (US$2.8 billion) in insurance premiums with local and foreign insurers.
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