Sonae sells insurance arm to UK firm Ardonagh, raises $100m – Banking & Finance

Sonae and Brazil’s IPLF Holding, which jointly control MDS, have signed an agreement to sell 100% of this risk and insurance advisory group to Ardonaugh Group, the UK’s largest independent brokerage group, in a statement. It was sent to newsrooms on Thursday, December 23rd.

In a statement published on the website of the Portuguese Securities Market Authority (CMVM), the group led by Claudia Azevedo revealed that “the transaction involves the sale of 50% of the capital of the MDS Group for a procedure of approximately €100 million. It should generate a capital gain of approximately 74 million for Sony.” .

Maia Group ensures that with this process “there will be no impact on the consolidated revenue or on the consolidated EBITDA of Sonae”.

The current management and leadership team of the MDS Group, headed by José Manuel Dias da Fonseca since 2000, will remain fully functional, providing it with new resources and capital, as well as continuing organic and inorganic growth plans, which will translate into clear benefits for “key stakeholders” , emphasizing group sellers and buyers with Portuguese DNA.

This process, which “demonstrates the value of this asset developed from scratch at Sonae, allows MDS to take an important strategic step in the direction it has been taking, with the aim of strengthening its national and international presence in the field of insurance and risk advisory…”, it guarantees.

The Arduna Group, which employs about eight thousand people in more than 100 offices, is among the top 20 in the world in the insurance brokerage sector, with revenues of more than 1.5 billion dollars (more than 1.3 billion dollars). euro).

Its subsidiary Ardonagh Global Partners will remain the sole shareholder of the MDS Group, following the closing of the announced deal – which relies on usual regulatory licenses – and is expected to happen “during the first half of 2022”.

Sonae: “An attractive deal that enhances shareholder value creation”

“After a long and successful partnership, Sonae and IPLF Holding have agreed to the terms of this transaction with the Ardonagh Group, which will allow MDS Group and its experienced management team to accelerate its plan for growth and presence through a partnership with a leading insurance broker and broker in Europe, with a proven track record and solid experience in the sector.” , is considered an official source for Sonae.

“This operation is an integral part of Sonae’s active portfolio management strategy, as it is an attractive transaction that enhances shareholder value creation,” says the same maiato group official.

For José Manuel Dias da Fonseca, this process represents an extraordinary opportunity: “After considering all the alternatives, we in Ardonagh and his leadership team have identified a perfect fit with our vision and ambition for growth. To join an independent group with a culture and a global size of Ardonagh. With access to the resources and capital With our new shareholder’s money, we believe we will be able to accelerate the MDS Group’s organic and inorganic growth plans,” asserts the company’s CEO.

D’O’Connor, CEO of Ardonagh Global Partners, after commending “José Manuel and his entire team”, who “has developed a high reputation on a global scale for customer service, innovation and professionalism, and providing outstanding service to its clients for more than 30 years”, ensures that “MDS Group will continue to Keeping pace with the growth of the markets in which it operates, specifically in Portugal, Spain, Brazil and Africa.”

“The MDS Group is very well positioned to continue to support its clients in managing risk in an ever-changing world, while at the same time bringing other ‘brokers’ into the group who share this strategic and cultural alignment,” says O. Connor.

Sonae and IPLF Holding were advised by Bank of America as financial advisor, by law firms Morais Leitão, Galvão Teles, Soares da Silva & Associados, SP, RL and EY in their financial and tax due diligence work.

Securing the world from Porto

In 1984, Sonae created MDS – Sociedade Mediadora de Seguros, a restricted brokerage firm for the Internal Insurance Department. But it was only at the turn of the century that the “arm” of Sonae Insurance shifted to the market and began to internationalize. He then invested, in less than a decade, about 70 million euros in acquisitions.

The big leap forward occurred in 2002, with the purchase of 45% of Lazam, then the third largest Brazilian “broker” and one of the most important brokers in Latin America. Seven years later, Suzano (from IPLF Holding) buys 49.9% of MDS, SGPS – Sonae receives 47 million euros “cash” and MDS keeps 100% of Lazam.

Meanwhile, the company led by José Manuel Dias da Fonseca acquired 32.12% of the global British giant Cooper Gay Swett & Crawford for 35 million euros – it was the largest operation of the Portuguese company in the insurance sector abroad. In 2013, Sonae raised 12 million euros through the partial sale of its stake, reducing its position in the world’s largest independent broker at that time to 9.72%.

Prior to that, in 2005, MDS reached sector leadership in Portugal after purchasing Unibroker and Becim from the Amorim Group.

In the previous year, he founded Brokerslink in Porto, which started as an informal network of four independent brokers that will become one of the largest global organizations of brokers and risk advisory services, present in more than 120 countries and integrated with around 21 thousand professionals.

In 2007, MDS was definitively converted to a Portuguese-Brazilian group, with Suzano holding 50%, while sharing control of the insurance group with Sonae.

Without taking a foot off the gas pedal in terms of buying, this year MDS has already made three purchases – two in Brazil (QHConsult and Tovese) and one in Angola (Média Mais).

The market leader in Portugal and one of the largest “players” in Brazil and Angola, MDS is also directly present in Mozambique, Spain, Malta and Switzerland.

MDS Group is also active in the field of flexible benefits and benefits management, with its 838 companies Soluções e Ben’s (Brazil) and Flexben (Portugal).

As a result of significant organic growth, as well as a strong acquisition policy, both in Portugal and abroad, MDS has taken a place in the best insurance brokers in the world, being the only Portuguese and Iberian group among the 250 largest insurance companies for brokerage firms in the world according to the latest ranking published by the international consulting firm Insuramore.

MDS ranks 141st in the 2020 rankings, with an estimated revenue of $79.4 million (€70.4 million), reflecting its performance in the various markets where it is globally present.

According to a statement released this Thursday by Sonae, MDS Group “recorded a turnover of 75 million euros in the 12 months to June 2021, managing over 500 million euros in insurance premiums.”