Australian insurer Steadfast has agreed to acquire Coverforce, a privately owned insurance broker, for approximately $302.04 (A$411.5m).
The announcement of the deal comes in conjunction with Steadfast’s financial year 2021 results, which recorded a net profit of A$143m compared to A$55.2m loss in the previous year.
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Founded in 1994, Coverforce focuses on small and medium enterprises. It has four divisions that include a wholly-owned insurance brokerage, equity-based partnership business Coverforce Partners, a specialist group income protection provider and the wholly-owned underwriting agency Quanta.
Steadfast aims to leverage Coverforce’s technology and services platform to enhance its offering and client diversification.
It will fund the acquisition through a combination of $146.8m (A$200m) institutional placement and $159.27m (A$217.8m) scrip consideration.
Steadfast managing director and CEO Robert Kelly said: “The merger of Coverforce into Steadfast represents a unique opportunity to further strengthen Steadfast as the largest general insurance broker network and largest group of insurance underwriting agencies in Australia.
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By GlobalData“The combination of both businesses is highly complementary with exceptional strategic and cultural alignment. Coverforce is an established insurance broker that has consistently delivered double-digit revenue growth rates, excellent operating efficiencies and consistent market-leading margins.”
Coverforce managing director and CEO Jim Angelis said: “We are pleased with the outcome of the transaction and it was important that our customers and industry relationships transitioned to a trusted partner that has a customer-centric platform that delivers exceptional service and superior insurance products.”
The acquisition is expected to be completed on 20 August 2021.
