Broking powerhouse Ardonagh hits $7.5bn market value with new large investors

Ardonagh Group, the UK's largest independent insurance broker with global reach, has secured a “significant” new equity investment from large global institutional investors alongside long-term shareholders Madison Dearborn Partners (MDP) and HPS in a transaction that values the business at $7.5 billion.

New co-investors, through accounts managed by MDP and HPS, include a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA), and several other large global institutions.

Under the transaction, funds affiliated with MDP will increase their shareholding in the Group and HPS will reinvest in the Group. Co-investors, including a wholly owned subsidiary of ADIA and several other large global institutions, will also acquire more than $1 billion equity through accounts managed by MDP and HPS as part of the transaction, which values Ardonagh at $7.5 billion.

Ardonagh highlighted that the investment follows its “successful transformation and significant growth over the past five years”, as well as its future growth prospects. As of 30 September 2021, the business had a Pro-Forma 12 month income of $1.5 billion and adjusted EBITDA of $530 million. In the last five years Ardonagh’s revenue and adjusted EBITDA have increased at compound annual growth rates of 25 percent and 46 percent, respectively.

Ardonagh was founded in 2017, and has grown to become a top 20 global insurance broker, placing $13 billion of premiums across the group and within its networks on behalf of clients across the full spectrum of insurance risks. The group currently employs a global workforce of approximately 8,000 people across more than 100 locations.

David Ross (pictured), group chief executive officer of Ardonagh, said: “The recommitment of both HPS and MDP continues a partnership that has helped Ardonagh grow into an international broking powerhouse. Continuity of ownership after six years is the optimum outcome for us, allowing management to focus solely on the execution of our strategy and the preservation of the unique Ardonagh culture.

“We are also delighted to welcome HPS and MDP co-investors to the Group. Their global, long-term ambitions are perfectly aligned with our own and those of our other shareholders, securing our goal of being a private enterprise for years to come. Today is a major milestone in Ardonagh’s journey and the achievement belongs to our greatest asset - every one of our people.”

Vahe Dombalagian, managing director and co-head of the MDP Financial & Transaction Services team, said: “We have supported Ardonagh since the formation of the Group and in that time, we’ve witnessed tremendous growth and diversification. Ardonagh has ample opportunity to continue to build on its platform and increase its reach and profitability, and by increasing our investment today we are reaffirming our commitment to continue supporting those efforts. We are proud to be a key shareholder behind the Ardonagh workforce and look forward to our continued partnership, alongside HPS and our and their new co-investors.”

Scot French, governing partner of HPS, added: “Throughout our multi-year relationship dating back to their first day at the Group, we have steadfastly supported the Ardonagh leadership team’s vision to build a best-in-class, global insurance brokerage platform. We are excited to remain meaningful investors in the Group as they continue to execute on their growth strategy.”

Hamad Al Dhaheri, executive director, private equities department, ADIA, said: “We are pleased to partner with Ardonagh, alongside HPS and MDP, to support its strong management team in executing its global growth strategy. This investment continues to build on our strategy and track record of investing in market-leading businesses across the insurance industry value chain.”

The transaction is subject to customary closing conditions including regulatory approvals and is expected to close in the first half of 2022.

Fenchurch Advisory Partners is acting as the exclusive financial advisor to Ardonagh.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.