Stardex
| Sector | Financial Services |
|---|---|
| Industry | Insurance Underwriting Agency |
| Location | Australia |
| Investment Date | October 2004 |
| Initial Deal Size | $28m |
| IRR | 21% |
Investment Rationale
Ironbridge Funds progressively invested $28.2m in the “buy and build” acquisition of eight insurance underwriting agencies, which collectively made up the Stardex Group.
Stardex became the largest independent underwriting agency in Australia and New Zealand with a number of independently branded, specialised agencies in the professional indemnity (PI), directors and officers (D&O), motor vehicle, agricultural, property public liability, aviation and marine insurance products.
Major attractions of the opportunity were:
- The strong underwriting profits being achieved in the industry;
- The synergy benefits in terms of systems, compliance costs and insurer leverage that could be achieved from a consolidation; and
- The potential to invest more capital in the business to allow it to obtain its own insurance licence and to underwrite its own risk.
Ironbridge Value Added
Ironbridge achieved positive developments from its strategic initiatives. The centralisation of the businesses allowed for the development of top quality systems and processes across the group, which was a key attraction for purchasers.
The numerous insurer relationships developed by Stardex gave it real leverage on commissions and competitive tension in the sale process.