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Steadfast acquires Coverforce in $411.5 million deal

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Steadfast has acquired Coverforce, one of Australia’s largest privately owned insurance brokers, for $411.5 million.

CEO Robert Kelly says the deal, announced this morning with the firm’s financial results, represents a unique opportunity for Steadfast, delivering a platform of scale with product and client diversification.

“The combination of both businesses is highly complementary with exceptional strategic and cultural alignment,” Mr Kelly said.

“Coverforce is an established insurance broker that has consistently delivered double-digit revenue growth rates, excellent operating efficiencies and consistent market-leading margins.”

Mr Kelly told today that Coverforce will “operate in its own right” and “retain its identity”.

“Our strategy is never to diminish the goodwill that comes into our business and if it’s not broken, don’t fix it. That includes the brand name.”

The transaction will be funded through a $200 million underwritten institutional placement and $217.8 million scrip consideration to the vendors, escrowed until after the release of the Steadfast fiscal 2022 financial results.

Coverforce has four divisions, comprising a wholly owned insurance brokerage that provides services to SMEs, the Coverforce Partners equity-based partnership business, the wholly owned Quanta underwriting agency and a specialist group income protection business.

Coverforce MD Jim Angelis says he looks forward to working with the Steadfast team.

“We are pleased with the outcome of the transaction and it was important that our customers and industry relationships transitioned to a trusted partner that has a customer-centric platform that delivers exceptional service and superior insurance products,” he said.

Steadfast delivered a full-year net profit of $143 million, with brokers and underwriting agencies performing strongly.

More details in our afternoon bulletin today.