The Ardonagh Group (“Ardonagh”), the UK’s largest independent insurance broker offering insurance for everything from classic cars to renewable energy, announces the successful completion of its £2 billion debt raise and the acquisitions of Arachas and Bravo Group for a combined value of over £550 million.
Ardonagh has raised £1.575 billion through a unitranche facility and £400 million through senior PIK toggle notes. Ardonagh also has access to a committed undrawn £300 million capital expenditure facility to fund its future growth plans. The unitranche facility and the capital expenditure facility are being provided by blue chip international
investors including Ares Management Corporation, Caisse de dépôt et placement du Québec, HPS Investment Partners, KKR, Oaktree Capital Management, L.P, Owl Rock Capital, underlining the attractiveness of the UK insurance broking to international investors.
The combined £1.875 billion commitment is understood to be the world’s largest ever unitranche financing arrangement. The £300 million war chest, in combination with existing cash resources, will be used to fund future acquisition opportunities in a fragmented market where successful niche insurance brokers are looking for partners with the expertise and financial scale to deliver their growth ambitions.
Established in 2017 with the backing of majority shareholders HPS and Madison Dearborn Partners, two premier US based private equity groups, Ardonagh has since grown rapidly through a series of acquisitions of leading insurance broking brands in the UK including Carole Nash and Swinton.
The acquisition of Arachas, the largest independent commercial insurance broker in Ireland, gives Ardonagh a substantial retail insurance presence overseas and, importantly, within the EU. Through the acquisition of Bravo, Ardonagh has gained two highly complementary segments which operate under three brands: Broker Network and Compass, which are two well-established network service providers to regional insurance brokers; and Ethos Broking, an active acquisition platform
focused on the UK regional insurance market.
Including the acquisitions of Arachas and Bravo, on a pro forma basis, the Group would have generated Total Pro Forma Income of £814.2 million and Total Pro Forma Adjusted EBITDA of £275.5 million, for the twelve months ended 31 March 2020. As part of the financing process, Ardonagh’s equity has been valued at £1.6 billion.
David Ross, Chief Executive of Ardonagh, commented: “The fact that we have secured this level investment despite the unprecedented uncertainty and market volatility is a huge endorsement of our proposition and the attractiveness of the UK’s world-leading insurance sector to international investors.
“We now have the right capital structure in place backed by specialist, blue chip investors and significant financial firepower to pursue our ambitious plans. We look forward to the future with renewed confidence.”