Ardonagh acquires PSC in A$2.3bn deal

BY Fraser Tennant

In a move that will see the UK-based insurance distribution platform expand its footprint in the region, Ardonagh Group is to acquire Australia's PSC Insurance in a transaction valued at A$2.3bn.

Under the terms of the agreement, Ardonagh will acquire all of the issued ordinary shares in PSC for A$6.19 in cash per PSC share. The acquisition has received the unanimous recommendation of the PSC board of directors.

Ardonagh stated that it will fund 50 percent of the deal from existing shareholders Madison Dearborn Partners and HPS Investment Partners and the rest from existing and new debt.

One of the world’s largest independent insurance distribution platforms and a top 20 global broker, Ardonagh has a combined workforce of over 10,000 people and a network spanning 200-plus locations in more than 30 countries.

Ardonagh intends to merge PSC’s Australia and New Zealand operations with Envest Pty Ltd, an entity it acquired in February 2023. The combined unit will become one of Australia’s largest privately owned insurance distribution platforms.

“This acquisition is a significant milestone in the global growth of Ardonagh and underlines our strong commitment to the markets we serve,” said David Ross, chief executive of Ardonagh. “Ardonagh has been assembled as a bastion of independence and scale, aligning high calibre businesses and management teams around quality advice for clients and entrepreneurial connectivity within the Group.”

In addition, PSC’s UK operations will be merged into Ardonagh Specialty and Ardonagh Advisory, further building the group’s position as one of the leading players in UK wholesale and retail broking.

“This transaction recognises the quality and strength of PSC’s people and business that has developed over the last 18 years,” said Paul Dwyer, chairman of PSC. “We believe this transaction maximises value for PSC shareholders while also providing an excellent platform for growth for PSC employees and our clients.”

The transaction, which is subject to customary regulatory approvals, is expected to be implemented in late 2024.

Mr Ross concluded: “PSC’s journey and values align with our own and its portfolio of highly complementary businesses provides an abundance of opportunity to strengthen our positions in Australia, wholesale and specialty markets.”

News: UK’s Ardonagh to buy Australia's PSC Insurance in $1.51 bln deal

Steward files for Chapter 11 to support restructuring

 BY Fraser Tennant

In what has been described as the biggest hospital bankruptcy in decades, healthcare provider Steward Health Care has filed for Chapter 11 bankruptcy protection. 

Among the factors driving the filing are insufficient reimbursement by government payors as a result of decreasing reimbursement rates, skyrocketing labour costs, increased material and operational costs due to inflation, and the continued impacts of the coronavirus (COVID-19) pandemic.

The company intends to resolve the Chapter 11 process as quickly as possible, with the help of the court, with a view toward the long term, sustainable financial health of the system.

“Steward Health Care has done everything in its power to operate successfully in a highly challenging healthcare environment,” said Ralph de la Torre, chief executive of Steward. “Filing for Chapter 11 restructuring is in the best interests of our patients, physicians, employees and communities at this time.”

In addition, Steward is finalising the terms of debtor-in-possession financing from Medical Properties Trust for initial funding of $75m and up to an additional $225m upon the satisfaction of certain conditions acceptable to Medical Properties Trust.

“With the additional financing in this process, we are confident that we will keep hospitals open, supplied, and operating so that our care of our patients and our employees is maintained,” continued Mr de la Torre. “By working collaboratively with stakeholders in this court-supervised controlled environment, and having the benefit of our earlier strategic efforts.”

Based in Dallas, Steward currently operates more than 30 hospitals across Arizona, Arkansas, Florida, Louisiana, Massachusetts, Ohio, Pennsylvania and Texas. It is the US’ largest physician-led, minority-owned, integrated healthcare system.

The company does not expect any interruptions in its day to day operations, which will continue in the ordinary course throughout the Chapter 11 process. Steward’s hospitals, medical centres and physician’s offices are open and continuing to serve patients and the broader community.  

Mr de la Torre added: “Steward will be better positioned to responsibly transition ownership of its Massachusetts-based hospitals, keep all of its hospitals open to treat patients, and ensure the continued care and service of our patients and our communities.”

News: US hospital network Steward files for bankruptcy, aims for new loan

CCP, Global Infrastructure Partners to acquire Allete for $6.2bn

BY Richard Summerfield

US utility group Allete is to be acquired by the Canada Pension Plan Investment Board (CPP Investments) and Global Infrastructure Partners (GIP) in a deal worth $6.2bn, inclusive of debt.

Under the terms of the deal, the firms will make a cash payment of $67 per share to take Allete private, a 19.1 percent premium over the company’s closing share price on 4 December 2023, the day before media reports that the power company was exploring a sale began to appear.

Allete’s board of directors has unanimously approved the transaction, which is set for completion in mid-2025, subject to shareholder approval and regulatory consents. Following completion, Allete will withdraw from the New York Stock Exchange and revert to private ownership.

“Our ‘Sustainability-in-Action' strategy has secured ALLETE’s place as a clean-energy leader,” said Bethany Owen, chair, president and chief executive of Allete. “Through this transaction with CPP Investments and GIP, we will have access to the capital we need while keeping our customers, communities and co-workers at the forefront of all that we do, with continuity of our day-to-day operations, strategy and shared purpose and values.”

She added: “CPP Investments and GIP have a successful track record of long-term partnerships with infrastructure businesses, and they recognize the important role our ALLETE companies serve in our communities as well as our nation’s energy future. Together, we will continue to invest in the clean-energy transition and build on our 100 plus-year history of providing safe, reliable, affordable energy to our customers.”

“Together with GIP, we look forward to bringing our sector expertise and long-term capital to support ALLETE’s strong management team as they continue to deliver safe, reliable, affordable energy services to their customers,” said James Bryce, managing director and global head of infrastructure at CPP Investments. “ALLETE is at the forefront of the clean energy transition and we are thrilled to support the delivery of the company’s ‘Sustainability-in-Action’ strategy, which we believe will generate substantial value both for ALLETE’s customers and CPP contributors and beneficiaries.”

“GIP, alongside CPP Investments, look forward to partnering to provide ALLETE with additional capital so they can continue to decarbonize their business to benefit the customers and communities they serve,” said Bayo Ogunlesi, chairman and chief executive of GIP. “Bringing together ALLETE, with its demonstrated commitment to clean energy, with GIP, one of the world’s premier developers of renewable power, furthers our commitment to serve growing market needs for affordable, carbon-free and more secure sources of energy.”

Allete’s existing management team, including Ms Owen, will continue to lead the company upon completion of the deal. The company’s headquarters will remain in Duluth, and commitments have been made to retain the workforce and maintain current compensation and benefits programmes.

News: US utility Allete goes private in $6.2 billion deal

Cyber attack methods continue to evolve – report

BY Richard Summerfield

Cyber criminals are deploying new and innovative lines of attack in addition to modified versions of existing methods, according to Verizon’s 2024 Data Breach Investigations Report.

According to the report, which analysed more than 30,000 real-world security incidents, including a record high of just over 10,000 confirmed data breaches, spanning 94 countries, the three most popular vectors for data breaches were unauthorised uses of web application credentials, email phishing and exploiting vulnerabilities in web applications, when excluding errors and misuse, typically honest mistakes by employees.

Attacks utilising the exploitation of vulnerabilities were up 180 percent, according to the report. This increase comes as no surprise given the mass exploitation of the MOVEit zero-day vulnerability and other similar vulnerabilities. Primarily, these attacks utilised ransomware and other extortion-related threat actors, and the main entry point was web applications. Attacks involving ransomware or extortion have seen considerable growth over the past year, accounting for 32 percent of all breaches.

“The exploitation of zero-day vulnerabilities by ransomware actors remains a persistent threat to safeguarding enterprises,” said Chris Novak, senior director of cybersecurity consulting at Verizon Business.

The human element also had a substantial hand in the number of recorded breaches. Sixty-eight percent of breaches involved a non-malicious human element. Accordingly, the onus remains on organisations to improve security awareness among their employees in order to reduce the impact of breaches. The report explains that the most common causes of breaches involving a non-malicious human element are someone falling victim to a social engineering attack or someone making a mistake.

“In either case, these could have been mitigated by basic security awareness and training. This is an updated metric in the report (we would previously include malicious insiders), and it is roughly the same as the previous period described in the 2023 DBIR,” Verizon added.

Report: 2024 Data Breach Investigations Report

GTCR acquires AssetMark in $2.7bn transaction

BY Fraser Tennant

In a deal that expands the private equity company’s footprint in the financial services industry, GTCR is to acquire wealth management platform AssetMark Financial Holdings, Inc. for approximately $2.7bn.

Under the terms of the definitive agreement – which has been unanimously approved by the AssetMark board of directors – GTCR will acquire a 100 percent interest, with AssetMark stockholders receiving $35.25 per share in cash.

Since its inception, GTCR has focused on identifying and partnering with management leaders in core domains to acquire and build market-leading companies through organic growth and strategic acquisitions. To date, it has invested more than $25bn in over 280 companies.

“AssetMark is a leader in the wealth technology industry, combining a high-quality service orientation with innovative technology and products that financial advisers rely on to support their clients,” said Collin Roche, co-chief executive and managing director at GTCR. “We would like to congratulate Huatai Securities, AssetMark’s majority shareholder, on the substantial increase in the scale and profile of the business during its ownership.”

With approximately $117bn of assets on the platform, AssetMark delivers an extensive suite of technology solutions and service offerings which enable independent financial advisers to create and manage customised client investment portfolios, report and analyse performance, custody assets, attract new clients and grow their advisory business.

Serving over 9300 financial advisers and over 257,000 investor households, the AssetMark platform differentiates itself through its comprehensive end to end offering and the personalised, high-touch service model it delivers to its financial adviser customers.

“This transaction will deliver substantial value for our shareholders, supports key elements of our strategy, and creates new and exciting opportunities for our employees,” said Michael Kim, chief executive of AssetMark. “In partnership with GTCR, AssetMark will continue to focus on expanding offerings for our clients with new product capabilities while maintaining our reputation for excellent client service.”

The transaction is subject to customary closing conditions and required regulatory approvals and is expected to close in Q4 2024. Upon completion of the transaction, AssetMark’s common stock will no longer be listed on any public market.

Michael Hollander, managing director at GTCR, concluded: “GTCR expects to support AssetMark as the company pursues additional inorganic M&A opportunities to further expand the leading service offering it provides financial advisers.”

News: PE firm GTCR to buy wealth management platform AssetMark for $2.7 bln