Australia's PSC Insurance to acquire Lloyd's broker Paragon for an estimated £42m
Australian broker PSC Insurance Group is acquiring 100 percent of the share capital of Lloyd’s and London Market broker Paragon International Holdings for a base consideration of £42 million (approximately A$75 million).
The final consideration is subject to adjustment based on the EBITDA of Paragon for the years ended 31 December 2019 and 2020.
PSC will raise $35 million from an institutional share placement to finance part of the transaction.
Paragon provides wholesale brokerage services to clients in the US and both direct and wholesale brokerage services in the UK, specialising professional and financial lines. The company generates over 60 percent of its revenue from the US wholesale market.
PSC said the acquisition will provide it with exposure to the significant US market, and nearly double the EBITDA of itsUK businesses. It is expected to generate incremental annual EBITDA of £4.2 million (approximately A$7.5 million) for PSC.
Post completion, Paragon will continue to operate as an autonomous business unit of PSC under its current leadership team. The deal is subject to approval from the UK's Financial Conduct Authority.
Tony Robinson, managing director of PSC, said: “The acquisition of Paragon will greatly add to the scale and expertise within our UK businesses and we will enhance our position as a leading Lloyd’s broker providing services to US insurance brokers.
"Tara Falk and James Kalbassi have built a very impressive business over more than two decades, and we are very pleased to be partnering with the whole team at Paragon. Many of the Paragon team will become material shareholders in the PSC Group. With the anticipated completion of the acquisitions of Griffiths Goodall and Paragon, the PSC Group will control in excess of A$1.5 billion in premiums, making us an increasingly important participant in our key markets."
James Kalbassi, co-CEO and founder of Paragon, said: “This is a very exciting transaction. We are building from a position of strength, with a compelling, broader independent platform to create a more powerful specialty broking business. Our strategy remains unchanged : we will continue to differentiate the Paragon brand as a specialist Lloyd’s broker, with everyone continuing to focus on our customers and the opportunity to accelerate the growth of our business.”
Co-CEO and founder Tara Falk added: “PSC understands what is special about our business and recognises Paragon’s long term potential. We are aligning Paragon with like-minded people, who are customer focussed, have built a great business themselves and who share our ambition and vision for the future. We will continue to build on the successful Paragon model to drive PSC’s international growth objectives.”
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