16 February 2015 Insurance

QBE sells Australian agency businesses to Steadfast

QBE has sold all of its Australian agency businesses to broking network Steadfast Group for A$290 million ($225 million).

The agency businesses consist of CHU Underwriting Agencies, Corporate Underwriting Agencies (also known as Body Corporate Brokers or BCB) and Underwriting Agencies of Australia.

The up-front cash consideration represents an EBITDA multiple of approximately 8x. The sale is expected to complete in late March 2015.

QBE added that the final consideration is subject to an earn out based on 2015 and 2016 performance relative to 2014, and will fall within the range of A$232 million to A$348 million.

John Neal, QBE group chief executive officer, said: “We are pleased to progress another important step of our capital plan with the sale of the Australian agency businesses at a price we consider to be attractive for our shareholders.”

“An important element of the sale is the 10 year exclusive distribution agreement we have entered into with Steadfast to retain the underwriting business provided by the agencies. We look forward to continuing to work closely with Steadfast and CHU, CUA and UAA to further grow our programme business.”

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