According to PSC Insurance, it has formally ended discussions regarding the memorandum of understanding for the proposed transaction, which would have seen the business acquire a 50% stake in the UK retail division of AUB-owned London brokerage Tysers.
Without explaining further, PSC Insurance said: “The group has a solid pipeline of acquisitions, and our balance sheet is in a strong position to continue to grow this with our selective and disciplined M&A (mergers and acquisitions) strategy.”
Meanwhile, in its own announcement, AUB said: “Following considerable discussions and progress with PSC in relation to the JV, AUB has decided not to proceed with the JV. Accordingly, AUB will continue to own 100% of the entire Tysers business, including Tysers UK Retail.”
In response to the deal falling through, AUB has outlined its next move.
“AUB was due to receive AU$100 million from PSC under the JV,” the insurance group said.
“Given the JV is not proceeding, AUB is undertaking an equity raising as a result of not receiving these proceeds and to increase financial flexibility and balance sheet strength to allow AUB to capitalise on its attractive and value accretive bolt-on acquisition pipeline, having spent / committed to spend an expected AU$149 million on bolt-on acquisitions in FY23.”
The Tysers parent went on to describe the broker’s retail unit in the UK as a highly attractive business with meaningful scale, deep client relationships, and strong organic and inorganic growth potential.
“Owning 100% will enhance AUB’s strategic alignment with the rest of Tysers and AUB, with increased cross-sell opportunities,” it said.
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