AUB Group has approved a consortium between private equity heavyweights EQT and CVC to pursue its acquisition, a move that would value the Australian insurance broker at about A$5.25 bn ($3.43 bn).
Funds managed by both EQT and CVC – along with potential co-investors – would jointly own the business if the deal proceeds.
According to AUB’s statement, EQT confirmed the proposal holds at A$45 per share, the same price as its earlier indicative offer.
AUB currently has 116.6 mn ordinary shares on issue, putting the proposed transaction’s total value at roughly A$5.25 bn.
“Since our inception in 1985, we committed ourselves to safeguard a stronger future for clients, partners, employees and shareholders – and we stand by that commitment today,” AUB Group says.
Whether we are providing products, services and solutions that help protect them from harm, damage and financial burden, our partners and advisors provide trusted support and guidance to clients on the optimal combination of physical, people and financial risk solutions.
“The driving philosophy behind our success is an equity based business model where the owners remain directly responsible for the day to day operations. At the same time, each business actively leverages the advantages of our scale, infrastructure, and operational know how. Together, we are actively building extraordinary businesses”.
The company had already entered into a confidentiality and exclusivity agreement with EQT, allowing it to conduct due diligence for a potential 100% acquisition via a scheme of arrangement.
Things shifted on Nov. 9 when EQT told AUB it had received an approach from CVC Asia Pacific to partner on the bid.
EQT then asked for an extra two weeks of exclusivity to wrap up due diligence and lock down transaction documents for the joint proposal.
AUB’s board signed off, granting EQT permission to form the consortium and extending the exclusivity window until Dec. 4. The confidentiality agreement will now be updated to reflect those changes.
We think this partnership signals a tightening race among global private equity players for control of Australia’s growing insurance distribution market – one where scale, data, and local reach are quickly becoming the winning combination.
AUB Group is an Australian insurance broker and underwriting agency network, listed on the ASX, that operates in Australia and New Zealand.
The company uses an equity-based model where it holds ownership stakes in its partner businesses, which include insurance brokers and underwriting agencies, to provide a wide range of risk and financial solutions to over 1.2 mn clients.
The company’s revenue comes from commissions from insurers, profit sharing with associates and joint ventures, and other service-related income
