Steadfast Group prices $280m placement above floor price

afr.com:

Insurance broker roll-up Steadfast Group had no troubles finding backers for its latest M&A bet and an accompanying $280 million institutional placement on Thursday.

Steadfast’s latest M&A bet had good support among fund managers.  

Sources said Steadfast’s brokers, JPMorgan and UBS, completed the variable price bookbuild at $5.14 a share overnight or 8¢ higher than the $5.06 floor price.

The price was set by evening, Sydney time, although the book remained open until 5am AEDT on Friday for overseas investors keen to get a slice of the discounted stock. It’s a good outcome and took Steadfast from selling new shares at 6.5 per cent discount to about 5 per cent.

The raising, revealed by Street Talk on Thursday morning would fund the upfront acquisition payment for Sure Insurance, and an incremental earn-out payment for the aquisition this financial year. It would also provide Steadfast additional debt headroom capacity to fund acquisitions and/or potential deferred earn-out payments, the term sheet said.

Sure Insurance is an underwriting agency focused on providing home and contents insurance in regional Queensland that ended financial year 2023 with $20.6 million in EBITA. Steadfast is starting with an initial 70 per cent stake at 10.33-times EBIT.