Australian broker Steadfast exploring acquisitions as it eyes US expansion
Australian P&C broking network Steadfast Group is exploring acquisition targets as it looks for opportunities to enter the US market, this publication can reveal.
Sources said the company has approached some US bankers and consultants as it is actively looking for companies to acquire.
Steadfast is the largest broking network in the Australasia region, with a market cap of A$6.3bn (~$4.2bn), according to S&P Capital IQ.
The platform operates a network of 417 brokerages – 342 in Australia, 53 in New Zealand and 22 in Singapore, according to an investor presentation.
The Sydney-headquartered company also controls a network of 28 underwriting agencies with A$1.8bn GWP in 2022.
The intermediary posted revenues of A$1.1bn and A$340mn Ebitda for fiscal year 2022 as well as organic growth of 11.3% and acquisition growth of 5.2%.
For fiscal year 2023, the company expects to boost its annual Ebitda to A$400mn-A$420mn, according to the presentation.
Over the last years, the acquisitive firm has boosted its war chest to grow via M&A in the Australasia region.
For 2023, the broker has 10 signed term sheets and another three issued while it is looking at 49 other potential M&A opportunities.
Last August, Steadfast acquired the retailer Insurance Brands Australia for over A$300mn while the previous year the firm took over the Australian insurance broker Coverforce for over A$411mn.
Founded in 1996, the firm began trading publicly on the Australian Stock Exchange in 2013. Steadfast is led by co-founder and CEO Robert Kelly.
The brokerage is exploring a deal as other broking firms have pursued M&A strategies to venture into the US market.
Last year, UK brokerage Howden Group acquired reinsurance intermediary TigerRisk for over $1.6bn, in a deal revealed by this publication.
Meanwhile, M&A activity in the US broking sector slowed down in Q1. Optis Partners reported in April that transactions in the retail, wholesale and TPA sectors totaled 143 deals, down from 160 in Q1 last year.
Yet, some US platforms are going through strategic processes as they look to attract new backers. This year, this publication revealed that Hub International, World Insurance Associates, Inszone and Ori-Gen are looking to bring in new investors.
More recently, last month Inside P&C revealed that Atlanta-based retailer Oakbridge Insurance Agency, which is backed by Corsair Capital, retained Morgan Stanley and Piper Sandler as it looks for fresh capital.
Steadfast did not respond to a request for comment.