PSC Insurance Group has announced an agreement to acquire Ensurance, an underwriting agency specialising in professional and financial lines.

The Melbourne-based brokerage says the acquisition – which is made via a binding scheme implementation deed that puts the purchase price at no less than $25.2 million – will add a “high growth” operation and new product suite to its Australian Specialty businesses.

“PSC is confident that the merging of the [Ensurance] operation will create significant growth opportunities for the group,” the business said today in an ASX market announcement.

“In particular, this includes the ability of the [Ensurance] business to benefit from the extensive distribution network of our Specialty business, together with the inclusion of the product onto PSC’s new APEX platform.”

PSC expects to gain in excess of $1.5 million in annualised earnings before interest, tax, depreciation and amortisation (EBITDA) in the first year following completion of the acquisition.

“We’re buying the company because we like the business inside and the individuals in particular. It’s a really capable group and it’s also a well-run underwriting agency in the areas that we particularly like,” MD Tony Robinson told insuranceNEWS.com.au.

The acquisition follows PSC’s purchase of the UK business of Ensurance for $8.2 million, which closed this year after securing regulatory clearance in the UK.

Implementation of the scheme is targeted for late November and is subject to a number of customary conditions including Ensurance shareholder and court approvals.

Ensurance Chairman Tony Leibowitz says the proposed acquisition will allow the business to “continue to grow and thrive as part of a much larger company that has the balance sheet strength, resources and global reach required to help unlock its full potential”.

“We look forward to working with PSC to complete the transaction over the next few months,” he said.

The board of Ensurance has recommended that shareholders approve the scheme in the absence of a superior proposal – as that term is defined in the implementation deed – and provided that the independent expert’s report has concluded that the scheme is in the best interests of shareholders.

Under the terms of the scheme PSC will seek to acquire all of the shares of Ensurance in a deal that has the purchase price at “the greater of $25.2 million and 5,000,000 fully paid ordinary shares in PSC”.

Ensurance shareholders will receive about 0.056 new PSC shares for each share they currently own in the underwriting agency.

The final acquisition price will be satisfied by way of the issue of five million PSC shares to Ensurance shareholders, with any difference between the value of those shares and the purchase price of $25.2 million to be paid in cash.