A new stake transaction has pegged The Ardonagh Group to an enterprise value of approximately £1.9 billion (US$2.4 billion).
It has been announced that certain institutional investors and other minority shareholders of Ardonagh are selling their shares to investment funds managed by Madison Dearborn Partners, LLC (MDP) and HPS Investment Partners, LLC (HPS). The total consideration is £92 million (US$117 million) – a combination of £82 million (US$104 million) from MDP and £10 million (US$13 million) from HPS.
Expected to complete on June 07, the acquisition will see MDP funds’ shareholding in the brokerage rise from 33% to 43% while that of HPS funds will increase from 52% to 54%.
“Alongside HPS, we are pleased to affirm our commitment to the Ardonagh platform, and we are excited about the strong trajectory of the business as it keeps strengthening its position as a leading independent insurance broking platform in the UK,” stated Vahe Dombalagian, managing director and co-head of the MDP financial & transaction services team.
“Ardonagh remains a unique investment opportunity, given its talented management team and diversified portfolio of brands and leading positions in niche markets across a broad spectrum of insurance sectors.”
At £1.175 (US$1.495) apiece, the price of Ardonagh TopCo and Sentry B shares translates to a total equity valuation for the group of about £860 million (US$1.1 billion).
“We continue to enjoy a truly collaborative relationship with both MDP and HPS,” commented Ardonagh chief executive David Ross, who believes the deal signifies a long-term commitment from shareholders who have a deep understanding of the markets in which the group operates.