PSC Insurance Group will acquire the UK operations of ASX-listed Insurance in a deal valued at $8.2 million.
The two parties announced the non-binding agreement this morning, in which PSC will pay $6.15 million in cash and the remaining $2.05 million via PSC shares for Insurance UK, a construction-based underwriting agency with offices in London and Manchester.
PSC says the investment is “highly complementary” to its strategy for the UK, a market where it has built a significant presence with brokerage acquisitions. It says Insurance UK makes around $4.4 million in annual revenue, has deep distribution in the local brokerage market and strong underwriting capacity for support.
“It is highly complementary to our existing Chase Underwriting UK construction underwriting agency business, expanding our current distribution platform and product range,” PSC said.
Insurance says the company has decided to sell the UK arm to focus on the “huge” growth opportunities in the Australian market. The underwriting agency has said in previous updates for investors to the Australian Securities Exchange (ASX) that it is making progress with its expansion plans here.
“Our Australian business is growing rapidly and we believe there is a lot more growth to come,” CEO Tom Kent said.
“We now have a nationwide network of offices and demand for our specialty insurance offerings, which are backed by leading underwriters, continues to grow.
“We have made the strategic decision to redeploy capital from the sale of the UK business into our Australian business to ensure that we can take full advantage of these growth opportunities.”
He told insuranceNEWS.com.au the company will shift to environmental responsibility and has made key hires in recent months to support growing Australian operations.
“We will expand the products in the long-tail areas. We will also move to short-tailed classes,” he said. “At the moment, our main product line is professional indemnity.”
He says the company has a “huge avenue” for growth and currently has around 1,000 individual brokers and 150 brokerages to distribute its products.
The deal remains subject to due diligence and regulatory approvals, and both parties aim to sign transaction documentation by the end of this month.