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Published 05 June 2013 11:31, Updated 26 November 2013 18:35
IPO hopeful Steadfast appointed former QBE Insurance chief Frank O’Halloran as chairman last year. Photo: Andrew Quilty
The country’s largest network of insurance brokers, Steadfast, is expected to begin its initial public offering pre-marketing to fund managers by the end of this month, with joint lead managers JPMorgan and Macquarie Capital finalising their research.
Steadfast, which represents 280 brokers in Australia and New Zealand and generates about $4.1 billion in annual insurance premium revenue, added a new weapon to its armoury last year, appointing insurance’s “acquisition king”, former QBE executive Frank O’Halloran as chairman. It’s a move, analysts say, that is likely to give the capital-raising more credence with investors.
The $350 million-plus float has been some time in the making, with tax issues and other setbacks delaying the process. However BRW’s sister publication, the Australian Financial Review claims some fund managers have already looked at the business and indicated it “should be a reliable earnings generator”.
Some fund managers have already looked at the business and indicated it ‘should be a reliable earnings generator’.
Documents filed with the Australian Securities and Investments Commission show the group plans to conduct an initial public offering in July, with trading in its shares beginning in mid-August. It’s restructuring itself so it acquires equity stakes in up to 70 brokers and four underwriting businesses ahead of the float.
In the papers lodged with ASIC, Steadfast says a public listing will strengthen its capital flexibility, provide more scope for capital raising, and give insurance brokers – many of whom are babyboomers nearing retirement age – more options when it comes to succession planning. The company’s plans, including details on a restructure, will be put to members at an extraordinary general meeting on June 14.
One significant change in the way the group operates could see owner-manager brokers becoming employees, a factor that could influence investor interest. The question of whether employee managers run a business as well as owner-operators is one that needs to be asked, analysts say.
Steadfast told BRW it will refrain from making statements about its proposed listing prior to the release of its prospectus in the coming fortnight. Chief executive Robert Kelly was in Europe for business and unable to take BRW’s calls.