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Whitbread acquisition is a perfect fit, says Steadfast

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Steadfast says its decision to buy Melbourne-based Whitbread Insurance Group for $95 million offers “an excellent strategic and cultural alignment”.

Whitbread is a member of the Steadfast network and focuses on the SME market, with offices in Melbourne, Sydney and Brisbane. The group also owns Axis Underwriting Services, a major player in niche areas of property and liability.

Steadfast CEO Robert Kelly says Whitbread is a well-established business with a long track record of financial performance, plus a strong reputation in the market.

“We have a close, long-term relationship with Whitbread, which we look forward to building upon following this transaction,” he said.

“Axis will complement our existing agency portfolio. It has performed strongly while showing pricing and underwriting discipline to build long-term relationships in its market.”

As reported in a Breaking News bulletin earlier today, Steadfast plans to fund the acquisition through an institutional placement of $100 million to current and new shareholders, underwritten by JP Morgan and Macquarie Capital.

The group also intends to raise up to $25 million through a share purchase plan open to all eligible current shareholders.

Whitbread was founded in 1978 by John Whitbread. His children took over management following his death in 2010. The group recorded gross written premium of $62 million last financial year, with the brokerage servicing 15,000 clients. It specialises in the strata, commercial, personal and life insurance segments.

Axis has 9000 clients and provides about 11,000 policies, with gross written premium of $49 million. It will become the 25th member of the Steadfast Underwriting Agencies portfolio.

Joint CEO and Director John Paul Whitbread will continue with the business and has accepted a board position under the new ownership.

Chairman Angela Whitbread said the family “is pleased to transition ownership to Steadfast, which ensures the longevity of the company started by my father nearly 40 years ago and secures the future of our staff and client relationships”.

Steadfast says the acquisition is expected to be earnings accretive in the current financial year, excluding transaction costs.