McDougall Insurance Brokers and its parent firm, Definity Financial Corporation, have announced they have entered a definitive agreement to acquire Drayden Insurance, a large Alberta-based broker, for $208 million.
The transaction will be funded by Definity, through McDougall, using a combination of excess capital and debt.
After accounting for all related transactions, Definity’s ownership interest in McDougall will increase to approximately 78%. The acquisition is expected to close in the third quarter of 2023.
Drayden handles around $125 million in annual premiums. Founded in 1965, it employs more than 170 people across eight locations in the Edmonton area.
The acquisition grows McDougall to more than $860 million in annual premiums, with 860 employees in 65 offices, Definity said in a press release. The transaction is expected to be immediately accretive to Definity’s operating ROE and operating earnings per share.
"The addition of Drayden will provide immediate scale and market leading presence outside of Ontario," said Rowan Saunders, president and CEO of Definity.
"This acquisition reinforces Definity's commitment to build our insurance broker platform into another billion-dollar business for Definity."
Ross McDougall, CEO of McDougall, praised Drayden’s “experienced management team, highly valued brands, great culture and strong operational alignment” with its existing broker operations.
"This transaction will give McDougall a unique opportunity to expand nationally and immediately establish a leadership position in Alberta's insurance broker market,” McDougall said.
"We are excited about the opportunity to join the McDougall family given our common focus and shared values," said Brian Nielsen, president of Drayden.
"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."
Drayden is the second McDougall acquisition in as many months. Last month, it purchased McFarlan Rowlands Insurance Brokers, an Ontario-based broker, for aggregate cash and share consideration of $232 million.
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