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An international insurance group has offloaded its Australian retail broker business as it forges ahead with significant restructuring plans.
Ensurance Limited announced in May that it was reviewing proposals from potential buyers interested in its local broker operations, known as Savill Hicks Corp. Yesterday, the company confirmed that a deal worth around $4.1 million had been finalised.
“This agreement is a significant milestone for Ensurance, and a pleasing result for the team after months of negotiation,” said Ensurance chairman Tony Leibowitz.
“This disposal of our retail brokerage business delivers a wonderful result for the company and our shareholders, returning capital that we can now invest in pursuing our recently announced strategy.”
The deal will see Ensurance sell all of its shares in the broker business to SHC Insurance, an entity controlled by former directors Stefan Hicks and Brett Graves.
The seven-figure sale is comprised of $2.2 million in cash, the buyback of 30,140,905 Ensurance shares, the assumption of Savill Hicks employee entitlements by SHC Insurance and the cancellation of notes held by related parties of Stefan Hicks.
Vendor financing of approximately $1 million will also be extended under ordinary commercial terms, for a period of three months from the day of settlement, if required.
A statement released by Ensurance said the sale will free up management’s time to focus on the firm’s repositioning within the market and is expected to drive strong global growth.
“Cash funds received from the disposal of the retail brokerage business will be used to build out the company’s UK and Australian based operations, hire additional underwriting personnel to meet customer demand for its specialised construction-related insurance and to drive sales and marketing activity,” read the statement.
