Ardonagh Reaches $14 Billion Valuation With Stone Point Investment

Ardonagh Group has secured new investment from Stone Point Capital, almost doubling the valuation of the UK insurance broker to $14 billion in three years, according to people familiar with the matter.

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The deal will see Greenwich, Connecticut-based Stone Point become a “significant minority shareholder” in Ardonagh, said the people, who asked not to be identified because the information wasn’t public. Stone Point’s stake will likely be in the 15% to 20% range in the secondary equity sale, which valued Ardonagh at 16 to 17 times its annual earnings before interest, taxes, depreciation and amortization, one of the people said.

Ardonagh was last valued at $7.5 billion when Abu Dhabi Investment Authority invested in the firm in late 2021. It is majority-owned by private equity firm Madison Dearborn Partners. Private credit specialist HPS Investment Partners, set to be acquired by BlackRock Inc., owns a minority stake in Ardonagh.

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The deal is the latest in insurance broking that signals large-scale transactions are heating up in the industry, with both private equity and strategic buyers hunting for assets in the fragmented market. Arthur J. Gallagher & Co agreed to buy AssuredPartners in a $13.45 billion deal this month, its largest-ever acquisition. In September, Marsh McLennan agreed to buy McGriff Insurance Services in a $7.8 billion cash transaction, also its biggest.

Founded in 2017 from the combination of broker Towergate and four other entities, London-based Ardonagh has become one of the world’s 20 largest brokers in recent years. It generated pro-forma income of $1.9 billion in 2023.

Over the past three years alone, Ardonagh bought 13 businesses in markets including Brazil, Spain and Italy. This year, it bought Australia’s PSC Insurance Group for an implied equity value of A$2.3 billion ($1.5 billion), taking it private and combining it with its Envest business.

Private Credit

Ardonagh is also a large borrower in the $1.6 trillion private credit market, having secured what was the largest-ever loan from a group of private credit funds in 2020. Last year, Ares Management Corp. provided a direct-lending package worth about £1 billion ($1.3 billion) to support the sale of its personal insurance business to Markerstudy.

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Ardonagh’s latest funding is likely to prompt speculation about any next steps Howden Group, another major UK insurance broker, might take to boost growth. The company, founded by David Howden 30 years ago, has long been considered a likely candidate for an initial public offering.

The firm had an enterprise value of $13 billion in 2022. It is owned by 5,200 employee-shareholders, private equity firms General Atlantic and Hg, Caisse de Dépôt et Placement du Québec as well as the Howden Foundation.

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