Definity Financial unit McDougall Insurance Brokers has signed a C$208m (nearly $156m) deal to purchase Canadian independent insurance broker Drayden Insurance.
The deal is said to complement Definity’s current broker assets portfolio.
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Headquartered in Alberta, Drayden has eight locations in the Edmonton area and a workforce of over 170 people.
The business records nearly C$125m in annual premiums.
Upon deal completion in Q3 2023, McDougall will have 860 employees across 65 offices and more than C$860m in annual premiums.
Drayden president Brian Nielsen stated: “We are excited about the opportunity to join the McDougall family given our common focus and shared values.
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By GlobalData“For our employees and customers, this combination underpins our commitment to provide unrivalled service and supports continued investment in growing our business in Edmonton and the broader Alberta region.”
Definity will finance the deal with surplus capital and debt, raising its ownership stake in McDougall to almost 78%.
It anticipates the acquisition to immediately add to its operating return on equity and operating earnings per share.
In addition, it expects the deal to boost its earnings from distribution by more than 25%.
The transaction awaits regulatory clearance.
Definity president and CEO Rowan Saunders said: “The addition of Drayden will provide immediate scale and market-leading presence outside of Ontario.
“This acquisition reinforces Definity’s commitment to building our insurance broker platform into another billion-dollar business for Definity.”
McDougall CEO Ross McDougall opines that the deal will offer the company a leadership position in Alberta’s insurance broker space.
Last month, McDougall acquired Ontario-based McFarlan Rowlands Insurance Brokers and its affiliated entities for C$232m.
