PSC steps up UK focus with Ensurance acquisition
PSC Insurance Group will acquire the UK operations of fellow ASX-listed firm Ensurance 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 Ensurance UK, a construction-based underwriting agency with offices in London and Manchester.
PSC says the investment is “highly complementary” with its strategy for the UK, a market where it has built up a sizeable presence with broking acquisitions. It says Ensurance UK makes about $4.4 million in annual revenues, has a depth of distribution within the local broking market and strong supporting underwriting capacity.
“It is highly complementary with our existing Chase Underwriting UK construction underwriting agency business, expanding our current distribution platform and product range,” PSC said.
Ensurance says the business decided to sell the UK arm to focus on the Australian market’s “immense” growth opportunities. The underwriting agency has said in previous investor updates to the Australian Securities Exchange (ASX) that it is progressing plans to scale up here.
“Our Australian business is expanding rapidly and we believe there is much more growth to come,” CEO Tom Kent said.
“We now have a national network of offices and the demand for our specialised insurance offerings, which are backed by leading underwriters, continues to increase.
“We have taken the strategic decision to redeploy the capital from the sale of the UK operations into our Australian business to ensure we can take full advantage of these growth opportunities.”
He told insuranceNEWS.com.au the business will be moving into environmental liability and has made key hires in the last few months to support the growth of the Australian operations.
“We will be expanding products in the long-tail areas. We will also be moving to short-tail classes as well,” he said. “At the moment, our main product line is professional indemnity.”
He says the business has a “huge runway” for growth and currently has about 1000 individual brokers and 150 broking houses to distribute its products.
The deal remains subject to due diligence and regulatory approvals, and the two parties aim to execute transaction documentation by the end of this month.
