Aussie insurer Cover-Move Group has announced the acquisition of United States-based travel insurance provider Travelex Insurance Solutions.
The third largest retail travel insurance specialists in the United States, Travelex “is an excellent strategic fit” for the Cover-More Group, the company said in a statement, and will enter the fold for cash consideration of nearly $140 million (US$105 million).
The deal will be funded through a fully underwritten, pro-rata, accelerated non-renounceable entitlement offer to raise approximately $73.3 million with the balance funded through a downdraw of a corporate bank debt facility, the statement noted.
Travelex Insurance Services generated approximately US$124 million and US$9.5 million in gross written premium and EBITDA respectively for the previous 12 months ending June 30.
Cover-More has focused on expansion in the United States over recent months, with executive appointments made to the international business to try to drive growth.
The acquisition of Travelex will bring the business cost synergy opportunities and a larger footprint in the US market, the statement continued, as the business believes the acquisition will result in annual synergies of $500,000 to $1.5 million per annum, alongside “significant new revenue sources.”
The business also announced that it is in the final stages of negotiating a heads of agreement with two international insurers to create a two-party underwriter panel following the divestment of Great Lakes Australia by Munich Re
earlier this year.