Steadfast Group says its $301 million acquisition of Insurance Brands Australia (IBA) will strengthen its broking network as the business aims to build on its strong earnings results.

As reported in a Breaking News this morning, Steadfast announced it has entered into an agreement to buy IBA, the parent company of independent Melbourne-based brokerage Insurance House.

The acquisition was released alongside the listed broking network’s annual results, in which the business achieved a 29.3% rise in underlying net profit to $169 million from a year earlier and underlying revenues surged 26.2% to $1.14 billion – the first time it has cracked the $1 billion mark.

CEO Robert Kelly says IBA is an “amazing business”, pointing out that it has 70 locations across the country and about $438 million in annual gross written premium (GWP).

“It's a highly successful business… It’s got a great footprint across Australia,” Mr Kelly said today.

“It’s quite an amazing business. It also further strengthens our position as the leading general insurance broker network in Australia.”

Steadfast will pay an initial $276 million for IBA comprising of both cash and Steadfast scrip, with the remaining $25 million subject to meeting performance criteria this financial year. The deal is expected to close next Tuesday.

Mr Kelly says the acquisition is expected to be “immediately accretive” to the Steadfast Group.

“There'll be a natural increase in GWP so it's a pretty good business,” Mr Kelly said. “It enhances our earnings growth.”

Mr Kelly says the business was “outstanding” with its 2021/22 financial results. “The Group has produced consistently strong increases in profits in each year since listing in 2013,” he said.

Underlying earnings before interest, tax, depreciation and amortisation (EBITA) surged 29.5% to $340.4 million, driven by organic growth of 13.3% and acquisition growth of 16.2%.

Steadfast Broking achieved a 23.6% rise in EBITA to $269.7 million, as net revenue went up 21.6% to $716.1 million.

Steadfast Underwriting Agencies posted a 22.5% increase in EBITA to $146.4 million, supported in part by the continued rise in premiums.

For this financial year, Steadfast is aiming for underlying EBITA of $400-420 million and underlying net profit after tax of $190-202 million.