AUB Group Limited (AUB) has entered into a binding agreement to purchase Tysers, a leading Lloyd’s wholesale broker and is undertaking an equity capital raising to provide funding towards the acquisition.
Tysers is a leading specialist international insurance broker based in London and the 6th largest wholesale broker in the Lloyd’s marketplace, writing annual gross premiums of AUD3.6 billion. AUB Group entered into an agreement with sellers Odyssey Investment Partners to acquire 100% of Tysers for AUD880 million (GBP500 million).
The acquisition is consistent with AUB’s strategy to provide support for clients with international placement needs, to capture further economics in the broking value chain and accelerate scale in its Agencies.
Tysers strengthens AUB’s competitive position. Tysers’ specialist capabilities will allow AUB to design and deliver market leading products for AUB’s broker and agency network and to enhance the ability to establish new agencies and secure Lloyd’s binders.
Commenting on the transaction, Mike Emmett, AUB Group CEO said: “The acquisition represents an important next step in the AUB Strategy to build out our client offering and risk expertise. Lloyd’s is the largest insurance market in the world. Tysers provides AUB Group the ability to access a diverse range of risks and insurance types for our clients and broker networks in Australia and New Zealand whilst also gaining the capability to accelerate the establishment of new agencies in these markets. Clive Buesnel, Tysers CEO, is a highly respected insurance executive in the Lloyds and London market, and we are delighted to welcome him and the Tysers team to the AUB family as we embark on a new chapter for both AUB Group and Tysers.”
Clive Buesnel, Tysers CEO said: “AUB is the perfect partner to allow Tysers to continue our proud history and support our growth ambitions. The strategic and cultural alignment is clear, and we are excited about executing on future opportunities together. We are proud of our culture and track record and look forward to working collaboratively and innovatively with AUB.”
Jeff McKibben, Odyssey Senior Managing Principal said: “Tysers is a high quality leading independent Lloyd’s broker. We believe AUB Group will be a very good strategic partner for the business as it continues its post-COVID earnings recovery. We look forward to retaining ongoing exposure to Tysers through our investment in AUB and participating in the growth trajectory of the merged Group.”
Tony Robinson, PSC CEO said: “We are excited at the opportunity to partner with AUB for the proposed JV of the Tysers UK Retail business. It presents an opportunity for us to secure 50% of a meaningful UK Retail broker which is in line with our strategy to grow in the UK and diversify our insurance intermediary business.”
JV with PSC to acquire 50% of Tysers UK Retail business
AUB and PSC have entered into a Term Sheet under which it is intended that PSC will acquire a 50% stake in Tysers UK Retail as part of a 50/50 joint venture with AUB as soon as practicable after completion of the Acquisition. PSC’s acquisition of the 50% stake is intended to be at the same multiple and on the same commercial terms as the Acquisition. PSC expects to fund its equity contribution from existing resources.
PSC is an Australian listed insurance broking and insurance intermediary business with existing UK retail broking capability and with a similar culture and values to AUB. They have a strong track record of acquiring, owning and operating insurance intermediary businesses outside the Australia New Zealand region.
The JV agreement will contain agreed exit rights and mechanics, and entry into the JV is subject to due diligence, separation planning and any necessary regulatory and licensing approvals, with joint venture documentation customary for a transaction of this nature.