Australian insurance company Ensurance has entered into a share sale agreement with former directors Stefan Hicks and Brett Graves (and their controlled entities) to dispose of the company's Australian retail brokerage business.
Under the agreement, the company will sell all its shares in Savill Hicks Corp (SHC) to SHC Insurance Holding for AUD$4.1mn ($3mn) comprising AUD$2.2mn in cash, the buyback of 30,140,905 fully paid ordinary shares in ENA, assumption of SHC employee entitlements by the purchaser and the cancellation of convertible notes held by related parties of Stefan Hicks.
In a statement, Ensurance says that the agreement significantly advances the company’s restructuring plans.
The plans which were first announced in May, involve adoption of a “new strategic direction” and disposal of the Australian retail brokerage business.
The sale will result in the full divestment of the company’s retail brokerage arm, which includes the entire brokerage business, assets and management team.
This is a considerable milestone for the company, with the sale freeing up management’s time to solely focus on activities in support of the company’s repositioning and are expected to drive strong global growth from its business as a Managing General Agent (MGA) in the UK and Australia.
Cash funds received from the disposal of the retail brokerage business will be used to build out the company’s UK and Australian based operations, hire additional underwriting personnel to meet customer demand for its specialised construction-related insurance and to drive sales and marketing activity.
The sale is subject to a number of conditions precedent including shareholder approval.
The transaction is expected to complete within two months.