AUB Group, an Australia equity-based insurance broker network, has confirmed that it has reached an agreement to acquire wholesale broker Tysers from its current owner, Odyssey Investment Partners, for a sale price of AUD $880 million (GBP 500 million).
Last month, AUB maintained that it was still in discussions over a potential takeover of Tysers, after reports suggested that it had won a bidding war to acquire the broker.
Now, the deal has been confirmed, with the purchase price implying a 9x FY22 pro forma EBITDA, and with an additional deferred consideration of up to AUD 176 million (GBP 100 million) payable two years post completion, subject to Tysers’ achievement of agreed revenue growth targets with an upper bound of GBP 220 million.
Tysers is a specialist international insurance broker based in London and is the 6th largest wholesale broker in the Lloyd’s marketplace, writing annual gross premiums of AUD 3.6 billion.
AUB explained that the acquisition is consistent with it strategy to support clients’ international placement needs, to capture further economics in the broking value chain and to scale its agencies.
The acquisition will be funded from proceeds of an AUD 350 million equity raising, a placement of AUD 176 million (GBP 100 million) of AUB shares to the vendor of Tysers, and a new AUD 675 million multi-currency debt facility, and is set for completion in H1 2023.
As part of the deal, AUB has also agreed that Australian broking and insurance intermediary PSC will acquire a 50% stake in Tysers UK Retail as part of a 50/50 joint venture following the completion of the acquisition.
“The acquisition represents an important next step in the AUB Strategy to build out our client offering and risk expertise. Lloyd’s is the largest insurance market in the world. Tysers provides AUB Group the ability to access a diverse range of risks and insurance types for our clients and broker networks in Australia and New Zealand whilst also gaining the capability to accelerate the establishment of new agencies in these markets,” said Mike Emmett, AUB Group CEO.
“Clive Buesnel, Tysers CEO, is a highly respected insurance executive in the Lloyds and London market, and we are delighted to welcome him and the Tysers team to the AUB family as we embark on a new chapter for both AUB Group and Tysers.”
Buesnel added : “AUB is the perfect partner to allow Tysers to continue our proud history and support our growth ambitions. The strategic and cultural alignment is clear, and we are excited about executing on future opportunities together. We are proud of our culture and track record and look forward to working collaboratively and innovatively with AUB.”
Jeff McKibben, Odyssey Senior Managing Principal, also commented: “Tysers is a high quality leading independent Lloyd’s broker. We believe AUB Group will be a very good strategic partner for the business as it continues its post-COVID earnings recovery. We look forward to retaining ongoing exposure to Tysers through our investment in AUB and participating in the growth trajectory of the merged Group.”
Tony Robinson, PSC CEO further stated: “We are excited at the opportunity to partner with AUB for the proposed JV of the Tysers UK Retail business. It presents an opportunity for us to secure 50% of a meaningful UK Retail broker which is in line with our strategy to grow in the UK and diversify our insurance intermediary business.”