The two transactions are expected to scale the core business of AUB Group and improve its ability to utilise technology and target new customer segments
AUB Group has signed two separate deals with a combined worth AUD272m ($183m) to take full ownership of MGA Whittles Group and for acquiring a 40% stake in BizCover.
The equity-based Australian insurance broker network said that the two transactions will scale its core business and improve its ability to utilise technology and target new customer segments.
The MGA Whittles Group comprises MGA and the Whittles Group. MGA is an insurance broking group in Australia that offers broking and risk advisory services, while Whittles provides complementary services to the strata and property management industries.
AUB Group will acquire 50.1% stake in MGA and 100% of Whittles in a cash-cum-stock deal worth AUD140m ($94.18m). The consideration includes AUD29.1m ($19.58m) in cash and 8,764,996 shares of the insurance broker network to be paid and issued to shareholders of MGA Whittles Group.
AUB Group managing director and CEO Mike Emmett said: “MGA is a fantastic business. As one of Australia’s largest insurance brokers, the acquisition places MGA at the heart of Austbrokers and enables the next phase of our growth. In addition, the Whittles strata specialty will add a significant complementary capability to AUB.”
AUB Group to acquire 40% stake in BizCover
BizCover is an Australian online insurance distribution platform, which is engaged in analysing insurance needs. AUB Group is buying 40% stake in the company for AUD132m ($88.8m) plus a working capital adjustment expected to be AUD3m ($2m).
The online insurance distribution platform is said to digitally deliver multiple insurance quotes to offer customers the ability to buy cover instantaneously. Founded 11 years ago, the insurech company serves the small and medium-sized enterprises (SME) market directly and also via brokers and other white label partners.
According to AUB Group, BizCover has been targeting micro and smaller commercial clients successfully which naturally complements the SME client base of its Austbrokers unit.
BizCover managing director Michael Gottlieb said: “BizCover’s scalable platform and experience in managing high volume SME insurance along with AUB’s significant market share will bring mutual opportunities and benefits. We look forward to working closely with AUB to continue to innovate and simplify the purchasing of SME insurance.”