Steadfast buys QBE underwriting operations

In a statement to the ASX, QBE said it had agreed to sell 100 per cent of its agency operations to the brokerage group.

The sale will include QBE’s CHU Underwriting Agencies, Corporate Underwriting Agencies (CUA) and Underwriting Agencies of Australia (UAA) businesses.

“The up-front cash consideration is $290 million and represents an EBITDA multiple of approximately [eight times],” a statement from QBE said.

“The final consideration is subject to an earn out based on 2015 and 2016 performance relative to 2014, and will fall within the range of $232 million to $348 million,” the statement said.

QBE Group chief executive John Neal said this is another “important step” in the company’s capital plan, with the sale of the businesses at a price considered to be attractive for shareholders.

“An important element of the sale is the 10-year exclusive distribution agreement we have entered into with Steadfast to retain the underwriting business provided by the agencies,” Mr Neal said.

“We look forward to continuing to work closely with Steadfast and CHU, CUA and UAA to further grow our program business,” he said.