Ardonagh boosts presence in Portugal, Brazil, Africa with €200m MDS acquisition

The  Ardonagh Group will put €75 million of new business in the Portuguese, Brazilian and African markets under its Christmas tree following its purchase of Portuguese broker MDS for a presumed price tag of €200 million.

Headquartered in Porto, Portugal, MDS employs 900 worldwide, including in Brazil, where it is the country’s largest independent broker, as well as Angola, Mozambique, Spain, and Malta. MDS is the only Portuguese Lloyd’s Broker.

MDS' €74.8 million business (for the 12 months ended June 30, 2021) comes on managing more than €500 million in insurance premiums for 1.2 million private and corporate clients each year, Ardonagh said.

Ardonagh said it will buy 100 percent of the Portuguese firm from its two current shareholders and finance the sale via equity and debt.

Portuguese retail and financial conglomerate Sonae, seller of a 50 percent stake in MDS, said it would receive "cash proceeds of approximately €100 million" for its stake, putting the presumed price tag for the full firm at €200 million. The other seller, International Personal Finance, had not yet reported on the sale.

“MDS intends to continue taking full advantage of the fast growing and evolving Portuguese and Brazilian insurance markets and economies," Des O’Connor, CEO of the acquiring Ardonagh unit Ardonagh Global Partners, said.

"The business is ideally placed to support a broad range of clients to protect against a constantly changing risk environment, and to bring on board other culturally and strategically aligned independent brokers in the geographies in which it operates,” O'Connor said.

In addition to its core broking operations in property & casualty, health, retail and wholesale, MDS also operates Highdome PCC in Malta, offering alternatives to the traditional insurance market including captive and reinsurance solutions to large clients. MDS also holds multinational risk advisor Risk Consulting Group (RCG) and is the founding member and a shareholder of Brokerslink, a network of brokers and specialty risk and consulting firms in 122 countries.

The management team led by MDS Group Global CEO José Manuel Fonseca will remain with the business and continue to lead an expansive growth plan in all of the MDS territories.

José Manuel Fonseca commented: “Having considered our future very carefully, we saw in The Ardonagh Group and its leadership a perfect match for our vision and growth ambitions. We are incredibly excited to be joining forces with a global independent group with Ardonagh’s scale and dynamic culture. With access to Ardonagh’s considerable resource and capital, we look forward to accelerating our organic and inorganic growth plans.”

Ardonagh Group CEO David Ross (pictured) added: “We launched Ardonagh Global Partners at the start of the year to offer a home for businesses and management teams across the globe which want to plug into our commercial capabilities and resources, whilst maintaining the client service and culture that made them successful in the first place. We welcome José Manuel Fonseca and his global colleagues as an embodiment of just that and look forward to helping bring more products, connectivity and buying power to their clients.”

Closing of the deal is expected in the first semester of 2022, Sonae said. The usual array of approvals are required.

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