MDP and HPS funds take minority equity stake in UK-broker Ardonagh Group

Two investment funds have agreed to buy a £92million ($117 million) stake in independent broker the Ardonagh Group.

Madison Dearborn Partners (MDP) and HPS Investment Partners (HPS) will acquire what amounts to a minority equity interest in the UK-based broker, with £82 million ($104 million) from MDP and £10 million ($13 million) from HPS. The shares will be bought from existing institutional investors and other minority shareholders.

Under the deal Ardonagh TopCo Shares and Sentry B Shares will be bought for £1.175 per share ($1.495), giving a total equity group valuation of £860m ($1.1bn). Ardonagh said this equates to an enterprise value of approximately £1.9 billion ($2.4 billion).

Once the transaction is complete, MDP funds’ shareholding will increase from 33 percent to 43 percent, while HPS funds’ shareholding will increase from 52 percent to 54 percent.

Vahe Dombalagian, managing director and co-head of the MDP Financial & Transaction Services team, said: “Alongside HPS, we are pleased to affirm our commitment to the Ardonagh platform, and we are excited about the strong trajectory of the business as it keeps strengthening its position as a leading independent insurance broking platform in the UK.

“Ardonagh remains a unique investment opportunity, given its talented management team and diversified portfolio of brands and leading positions in niche markets across a broad spectrum of insurance sectors.”

David Ross, CEO of the Ardonagh Group, added: “We continue to enjoy a truly collaborative relationship with both MDP and HPS. Today’s announcement is a further example of the long term commitment to Ardonagh from shareholders who have a deep understanding of the markets in which we operate.”

The shares purchase is expected to close on 7 June 2019.