Major Investment Values Broker and Insurance Distribution Platform Ardonagh at $7.5 billionLast modified:
The Ardonagh Group has received a significant new equity investment into the Group, which underscores Ardonagh’s successful transformation and significant growth over past five years and Group’s future growth prospects.
The investment is led by existing long-term shareholders Madison Dearborn Partners, LLC (“MDP”) and HPS Investment Partners (“HPS”), alongside new co-investors through accounts managed by MDP and HPS, including a wholly owned subsidiary of the Abu Dhabi Investment Authority (“ADIA”), and several other large global institutions.
Under the terms of 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.
David Ross, Group CEO, 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.”
Ardonagh was founded in 2017 with a mission to become the employer of choice for entrepreneurial leaders and producers, and the broker of choice for clients across Retail, Advisory, Specialty and International platforms. Ardonagh 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.
As of 30 September 2021, Ardonagh had an LTM (Last Twelve Months) Pro-Forma Income of $1.5 billion and LTM Pro-Forma Adjusted EBITDA of $530 million. From 2016, which was the final year of operation for Ardonagh’s predecessor company, through 2021 (estimated), Ardonagh’s revenue and Adjusted EBITDA have increased at compound annual growth rates of 25% and 46%, respectively. The Group currently employs a global workforce of approximately 8,000 people across more than 100 locations.
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.