Last week’s acquisition of broker InterRISK demonstrates the strength of his group’s “owner-driver” model, Austbrokers MD and CEO Mark Searles says.

The model allows Austbrokers to grow and diversify income streams and gives brokers a succession plan that lets owners retain a shareholding.

As reported exclusively by insuranceNEWS.com.au in a Breaking News bulletin last week, Austbrokers has bought 77.1% of InterRISK for shares and cash, valuing the company at about $15.7 million.

Listed conglomerate Washington H Soul Pattinson sold its 40% share of InterRISK and Paul Cave, the founder of Sydney Harbour tourist attraction BridgeClimb, parted with 20%.

InterRISK was formerly a member of the Steadfast broker group.

MD Dennis Guy says the company had been considering its future strategy for some time, and decided Austbrokers’ tailored approach best met the needs of all shareholders.

Current management will remain and most have chosen to retain their shareholdings.

Mr Guy will become the Chairman of InterRISK Australia, replacing Washington H Soul Pattinson director David Wills. Austbrokers executives Steve Rouvray, Fabian Pasquini and Greg Arms will join the InterRISK board.

Mr Searles told insuranceNEWS.com.au that Austbrokers members have generally been regarded as brokers for SME businesses, but the addition of InterRISK increases the group’s presence in the corporate and large industrial sectors, including leading listed companies.

InterRISK brings wholesaling capabilities and will give the group greater capacity in the Lloyd’s market.

He says the transaction has enabled a transition of ownership that lets private equity investors sell out while company executives can retain a share in the business.

InterRISK General Counsel and Company Secretary Justin Coss told insuranceNEWS.com.au several suitors had approached the company with proposals.

He says the owners also considered staying with Steadfast and participating in its public float, but the board felt there were more uncertainties than with Austbrokers, which has a proven track record as a listed company and solid performance.

Mr Searles says the deal adds $80 million of profitable gross written premium to Austbrokers and earnings per share of about 3%.

Austbrokers’ basic earnings per share to June 30 last year was 46.3 cents but it has since made 15 acquisitions.