Broker network Austbrokers
has purchased 50% of workers comp service provider Procare Group in a move estimated to be worth $10m.
announced the move this morning ahead of the publication of its half-year results early next week. It says it has already made a completion payment of $7.3m (representing approximately 70% of the estimated purchase price), funded from cash held. The final purchase price will be determined based on performance for the year ending 30 June 2016.
CEO and Managing Director Mark Searles
said he is “thrilled” that Procare chose to partner with the network
“They had a number of more lucrative offers on the table but chose us on the strength of our 'owner-driver' business model, proven operating model and associated support services that will assist them in their growth ambitions,” he said.
“In addition to Procare-driven future growth, the services offered by Procare are complementary to existing Austbrokers
partner insurance broking businesses and will provide additional cross-sell opportunities," added Searles. "The acquisition will help underpin Procare’s value proposition to new clients by having an ASX listed partner shareholder, in addition to the company being able to leverage AUB group services including its datacentre.”
Procare is a leading Australian provider of full service workers compensation and insurance support services. Established in 1998, Procare employ s over 120 people providing services including integrated insurance and risk solutions, injury management, training, recruitment and placement of staff, investigations and claims and risk management.
"We look forward to the opportunities that will undoubtedly flow by joining the Austbrokers
network.” said Procare Managing Director Mark Colgan. “Procare has enjoyed a strong growth trajectory in recent years and we anticipate this growth to gain momentum as a result of Austbrokers
On a full year basis, it is expected that this acquisition will contribute approximately 1.5% earnings per share growth after allowing for full funding costs on the estimated purchase price