AUB Group Limited has announced the acquisition of a 95.9% stake in UK-based PIHL Holdings Limited (Prestige) for AUD 432 million, significantly expanding its UK retail insurance broking footprint. To fund this strategic move, AUB is launching a fully underwritten AUD 400 million institutional placement alongside a share purchase plan.
- Acquisition of 95.9% of UK broker Prestige for AUD 432 million
- UK retail gross written premium increases to approximately GBP 720 million
- Expected annual cost synergies exceeding AUD 10 million by FY27
- Fully underwritten AUD 400 million institutional placement at 7.9% discount
- Preliminary 1H26 underlying NPAT of AUD 90-91 million with reaffirmed FY26 guidance
Strategic Acquisition Bolsters UK Presence
AUB Group Limited (ASX – AUB), a leading insurance broking and underwriting group, has announced the acquisition of a 95.9% stake in PIHL Holdings Limited, trading as Prestige, for AUD 432 million. This move significantly enhances AUB’s footprint in the UK retail insurance broking market, increasing its gross written premium (GWP) in the UK retail segment to approximately GBP 720 million.
Prestige is a diversified insurance broking and underwriting platform with a strong presence across the UK and Northern Ireland, operating 18 retail broking branches and servicing a blue-chip client base. The acquisition complements AUB’s existing UK strategy by filling capability gaps and providing a scalable operating infrastructure.
Financial and Operational Highlights
The deal values Prestige at an enterprise multiple of 12.9 times calendar year 2025 EBITDA, which reduces to 10.0 times when factoring in anticipated synergies. AUB expects to realise more than AUD 10 million in annual cost synergies by the end of FY27, alongside additional revenue synergies through cross-selling opportunities with its existing UK businesses such as Tysers Wholesale and Retail.
To finance the acquisition, AUB is undertaking a fully underwritten institutional placement to raise AUD 400 million at an offer price of AUD 29.40 per share, representing a 7.9% discount to the last closing price. Additionally, a non-underwritten share purchase plan (SPP) targeting up to AUD 40 million will be offered to eligible shareholders. The company has also secured a new AUD 200 million debt facility with Macquarie Bank, improving its debt pricing and maintaining balance sheet flexibility.
Preliminary Results and Outlook
AUB’s unaudited preliminary results for the first half of FY26 indicate an underlying net profit after tax (UNPAT) in the range of AUD 90 million to AUD 91 million, reflecting solid organic growth despite foreign exchange headwinds and mixed performances across its Australian, New Zealand, and international operations. The company reaffirmed its full-year FY26 UNPAT guidance of AUD 215 million to AUD 227 million, excluding the impact of the Prestige acquisition and recent step-ups in Pacific Indemnity and AUB 360.
The acquisition and recent equity increases are expected to be earnings per share (EPS) neutral before synergies and accretive in the low to mid-single digits post-synergies on a pro forma basis for calendar year 2025. AUB anticipates that deployment of cash and debt headroom over time will further enhance EPS accretion.
Regulatory and Integration Considerations
Completion of the Prestige acquisition remains subject to regulatory approvals from the UK Financial Conduct Authority and notification to the Central Bank of Ireland, with expectations to satisfy these conditions before the end of FY26. AUB has disclosed comprehensive risk factors related to the acquisition, including integration challenges, potential loss of key Prestige personnel, regulatory risks, and financial risks associated with increased leverage and equity dilution.
The company’s owner-driver equity model, which sees Prestige management retaining a 4.1% stake, aligns incentives and supports a smooth integration. However, investors should remain mindful of the risks inherent in cross-border acquisitions and the execution of synergy targets.
Strategic Implications for AUB
This acquisition marks a significant step in AUB’s international growth strategy, particularly in the UK retail broking and managing general agent (MGA) segments. By combining Prestige with existing UK assets such as Tysers, Movo, and Momentum, AUB is building a comprehensive UK insurance ecosystem with enhanced scale, geographic coverage, and specialist capabilities.
The expanded platform positions AUB to capitalize on further bolt-on acquisitions and organic growth opportunities in a UK market that is more than twice the size of Australia’s insurance broking sector. The company’s focus on technology integration and operational efficiency is expected to underpin margin expansion and competitive positioning.
Bottom Line?
As AUB awaits regulatory approvals and begins integrating Prestige, investors will be watching closely to see if the anticipated synergies and growth ambitions translate into sustained earnings momentum.
Questions in the middle?
- Will UK regulatory approvals for the Prestige acquisition be granted on schedule and without conditions?
- How effectively can AUB integrate Prestige’s operations and realize the projected AUD 10 million in annual cost synergies?
- What impact will the equity raise and increased leverage have on AUB’s financial flexibility and shareholder returns in the medium term?