Steadfast poised to launch $280m equity raising; two brokers on ticket

afr.com:

The king of insurance broker acquisitions, Robert Kelly, is at it again.

Street Talk understands Steadfast is set to launch a $280 million equity raising as early as Thursday, comprised of a placement and share purchase plan. Proceeds will be used to fund an acquisition in Australia, sources said.

Steadfast boss Robert Kelly Photo: Nic Walker

JPMorgan and UBS are overseeing the deal. The same team raised $225 million for the general insurance broker in August 2022 at $5 per share when it was looking to buy Insurance Brands of Australia, a 41-year-old insurance distribution business focused on the SME sector. This was a major acquisition for the company, at a purchase price of $301 million.

JPMorgan and UBS also helped Steadfast raise $200 million to fund its acquisition of rival private insurance broker Coverforce and were on a $100 million raise for acquisitions in August 2019, acting as joint lead managers with Macquarie Capital.

Steadfast closed Wednesday’s trading day at $5.41. Its shares have gained 6.7 per cent over the past year. The insurance broker had a good FY23 with underlying profits up 22 per cent to $207 million and underlying EBITDA up 26 per cent to $403.7 million driven by premium increases and acquisition growth.

In October, Steadfast acquired US insurance agency network ISU Group for $US55 million, funded via existing corporate debt facilities and free
cashflow.