The Ardonagh Group has announced that it has acquired The Bravo Group and Arachas, the largest SME-focused commercial insurance broker in Ireland.
David Ross, Chief Executive of Ardonagh, commented:
“Today’s announcements represent an important step in the continued development of Ardonagh’s multi-product and multi-channel platform through sustained focus on organic growth and selective acquisition strategy, as we continue in our ambition to excel as the largest independent insurance broker in the United Kingdom and amongst the largest globally.
Bravo and Arachas are two strong, resilient businesses which are highly complementary to the Ardonagh platform and will allow us to further increase our diversification across products, channels, carriers, income producers. Our highly diversified business has enabled us to remain resilient as we navigate the recent challenges presented by the Covid-19 pandemic.”
The Bravo Acquisition
Bravo consists of two highly complementary segments which operate under three brands: Broker Network, Compass and Ethos Broking.
Broker Network and Compass are two well-established network service providers to regional insurance brokers. They have approximately 750 members across the United Kingdom, equivalent to around 60% of all UK network membership.
Ethos Broking is a highly active acquisition platform focused on the UK regional insurance Between November 2016 and April 2020, it has acquired over 30 independent brokers, through a “Hub and Spoke” acquisition strategy.
For the twelve months ended 31st March 2020, Bravo placed approximately £2.6 billion of GWP, both directly through Ethos and indirectly through its networks.
Arachas is the largest SME-focused commercial insurance broker in Ireland, with specialized offerings and a nationwide reach that has allowed the business to quickly gain a leading position in its core markets. With 139,000 policies under management as of 31st December 2019, Arachas is the Republic of Ireland’s largest commercial insurance broker.
Arachas specialises in corporate, SME and affinity scheme insurance products as well as providing a high net worth-focused private client service. Arachas delivers exclusive insurance solutions through a multi-channel distribution strategy which comprises a retail footprint of six offices and wholesale footprint of approximately 400 third-party brokers across the Republic of Ireland.
Within the Group, Arachas will provide an incremental set of product capabilities and carrier relationships for the broader platform to leverage while further enhancing the Group’s leading position, particularly among small and medium enterprise customers.
In addition, The Ardonagh Group also announced the following:
“The Ardonagh Group today (22nd June 2020) announces the launch of an offering of its $500 million senior PIK toggle notes due 2026.
The proceeds of the Notes, together with drawings under a new senior secured term loan facility of £1,575 million (equivalent), will be used:
- to redeem the Group’s £553,300,000 8.375% senior secured notes due 2023, USD $520,000,000 8.625% senior secured notes due 2023 and USD $235,000,000 8.625% senior secured notes due 2023 (the “Existing Notes Redemption”)
- to repay drawn amounts under the existing revolving credit facility agreement
- to fund the acquisitions of Nevada 4 Midco 1 Limited (holding company of Bravo Investments Holdings Limited) and Nevada 5 Topco Limited (holding company of Arachas Topco Limited) from funds managed by HPS Investment Partners (“HPS”), LLC and Madison Dearborn Partners (“MDP”), LLC, and to fund the acquisition of Bennetts Motorcycling Services Ltd
- to pay the fees and expenses incurred in connection with the foregoing transactions, including fees and expenses incurred in connection with the Offering, repayment of existing debt of the targets, costs related to the acquisitions and redemption costs including accrued interest incurred in connection with the Existing Notes Redemption; and for general corporate purposes.”