UK-based Ardonagh has announced it plans to buy PSC Insurance Group for an implied equity value of $2.26 billion.

The company says it has entered into a scheme implementation deed to acquire all the shares of Melbourne-based PSC for $6.19 in cash per share. The deal, which has secured the unanimous recommendation of PSC’s board, implies an enterprise value of $2.43 billion. 

Ardonagh intends to merge PSC’s Australia and New Zealand operations with Envest, acquired by the group in February 2023, making one of Australia’s largest privately owned insurance distribution platforms, placing $3.3 billion in gross written premium annually.

Envest CEO Greg Mullins will oversee the combined operations for Australia and New Zealand. 

PSC was founded in 2006 by chairman Paul Dwyer, who will join the Ardonagh senior management team upon completion of the deal and work closely with the leadership teams in Australia and at Ardonagh Specialty to integrate and grow the combined businesses. 

“Today marks an important day in PSC’s history,” Mr Dwyer said. “This transaction recognises the quality and strength of PSC’s people and business that has developed over the past 18 years. We believe this transaction maximises value for PSC shareholders while also providing an excellent platform for growth for PSC employees and clients.” 

Australian businesses already under the Envest umbrella include Resilium Insurance Broking, Aviso Group and a number of underwriting agencies.

Ardonagh says certain PSC directors and managers are rolling about 26% of their aggregate shareholdings in PSC into shares in the Ardonagh Group. 

Ardonagh Group CEO David Ross says the acquisition is a significant milestone in the company’s global growth and underlines its strong commitment to the markets it serves. 

“PSC’s journey and values align with our own and its portfolio of highly complementary businesses provides an abundance of opportunity to strengthen our positions in Australia, wholesale and specialty markets,” he said. 

PSC in March confirmed it had received “multiple strategic approaches” and was taking part in discussions. 

The company listed in 2015 and has grown into a diverse group incorporating broking branches, an authorised representative network and joint ventures. It has significant operations in Britain and Hong Kong. 

PSC’s underlying earnings before interest, tax, depreciation and amortisation rose 12% to $54.2 million in the first half of this financial year, and underlying net profit after tax before amortisation grew 6% to $37.1 million.

A scheme of arrangement to complete the deal is subject to approval by PSC shareholders as well as by the court. If all approvals are received, it's expected the scheme will be implemented in late September.