Suncorp

333 Capital role and sales process

Resilium is one of the largest privately owned insurance broker networks in Australia, providing insurance advice across a wide spectrum of business and personal insurances. This advice is delivered through Resilium�s network of more than 180 insurance brokers underpinning more than $400 million of gross written premium (�GWP�) per annum.

333 Capital was engaged by Suncorp, the previous owners of the Resilium business, to look at options to divest the business as part of Suncorp�s move away from vertical integration of distribution channels in their insurance business. The key goals for Suncorp in the sale of Resilium were:

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• To not sell the business to one of the existing large, listed broker networks who were perceived to already hold significant leverage over insurers.
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• To maximise an enduring strategic relationship with Resilium going forward to ensure it continues to be a key supplier of GWP to Suncorp.
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• To achieve �full� value for the business despite the preference to not sell it to one of the large, listed trade players. 
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Our approach

333 Capital explored various options for the sale of the business before landing on the preferred avenue of a management buy out (�MBO�). The activities undertaken included:

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• Preparing, in conjunction with Management, a detailed forecast financial model, inclusive of a bottom-up build of standalone costs and Management�s strategic business plan.
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• Preparing and presenting various papers outlining the different options available to Suncorp and the pros and cons of each.
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• Preparing all sales documents, including an initial �no-names� flyer and later a detailed information memorandum.
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• Conducting meetings with potential debt and equity providers to assist Management with understanding funding available under an MBO scenario.
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• Negotiating pricing and a long term strategic agreement with Management and their eventual equity funder � trade player Coverforce.
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• Managing the data room and QA process to support an efficient and fulsome due diligence process.
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• dvised on the sale contract including completion mechanics and a transition agreement.
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Outcomes

The process led to a successful MBO of Resilium, supported by Coverforce, for �full� value with a strong long term strategic agreement designed to maximise Suncorp�s future GWP from Resilium. Importantly, Resilium remained out of the control of the large listed broking networks and Suncorp will be contractually due additional funds if ownership of Resilium transfers from Management to Coverforce in the future (a scenario that Suncorp were supportive of). The value achieved, both in the price and the long term strategic agreement, was above all of Suncorp�s initial expectations.