The strategic investment, deemed “highly complementary” by AUB, is part of the group’s ongoing efforts to expand its portfolio of agencies.
The deal, valued at AUD$192 million, will see AUB pay AUD 105 million upon its expected completion on July 1, 2024. The remaining balance will be payable 18 months later, contingent on Pacific Indemnity’s performance during the 2024-25 period. This acquisition values Pacific Indemnity at an Enterprise Value (EV) to FY23 EBIT multiple of 13.0x.
To finance the upfront payment, AUB will raise AUD 200 million through a fully underwritten institutional share placement. The remaining AUD 95 million will support AUB’s mergers and acquisition pipeline and cover the costs associated with the equity raising.
Following the equity raising and the completion of the Pacific Indemnity acquisition, AUB anticipates maintaining a net leverage ratio below 1.75x, with approximately AUD $400 million in cash and undrawn debt.
Mike Emmett, AUB Group CEO and Managing Director, commented: “We are delighted to announce the acquisition of Pacific Indemnity, a high calibre business with an excellent management team which has delivered impressive growth to date.
“AUB has seen outstanding performance in our Agency portfolio. The acquisition of Pacific Indemnity will add scale, diversify our capabilities, and expand our expertise in financial lines.”
He added: “The acquisition also presents opportunities for mutual benefits across the business, through collaboration between Pacific Indemnity and the broader AUB Group.”
