Australia-listed insurance broker network AUB Group announced Monday its decision to terminate a deal to acquire the country’s largest private insurance broker, Coverforce Holdings, from Pemba Capital Partners for around A$150 million ($102 million) to A$200 million ($137 million).
In August, AUB Group signed an agreement to acquire a 49-per cent stake of Coverforce with Pemba Capital Partners, which is just one of Coverforce’s shareholders. The two firms, however, agreed to further work to effect the purchase of the shares of all other shareholders.
The planned acquisition faced resistance from Coverforce’s management, which holds 51 per cent. Coverforce CEO Jim Angelis was earlier quoted as saying that they did not approve the sake sale process and that Pemba did not have the authority to make the sale.
Established in 1994, Coverforce is the largest private insurance broker in Australia serving SME, mid-market and large corporate clients. The company is headquartered in Sydney and has branches in Adelaide, Brisbane, Melbourne, and Perth.
In 2017m, Coverforce quit the Steadfast network to join Insurance Brokers Network of Australia (IBNA), which at the time belonged to the AIMS joint venture partnership with AUB’s Austbrokers.
In a disclosure to the Australian Securities Exchange Monday, AUB Group said delivery of due diligence materials, which was one of the conditions of the agreement, has not occurred and it has not waived its right to due diligence.
“In consequence, and as the parties have been unable to reach agreement on an amended date for delivery of due diligence materials, the conditional sales agreement has been terminated,” the company said.
Following the termination of the deal, AUB said it will continue to apply disciplined approach to its M&A strategy to acquire businesses that accelerate scale and growth, leverage and expand its expertise in key insurance risk areas and market segments, among others.
AUB, an equity-based risk management, advice, and solutions provider in Australasia, currently services over 93 businesses looking after 550,000 clients.