Definity’s McDougall Insurance Brokers to Acquire Canada’s Drayden Insurance

McDougall Insurance Brokers Ltd., the Belleville, Ontario-based subsidiary of Definity Financial Corp., announced it has entered into a definitive agreement to acquire 100% of Drayden Insurance Ltd. for C$208 million (US156.9 million), subject to closing and post-closing adjustments.

The transaction will be funded by Definity, through McDougall, using a combination of excess capital and debt. After accounting for all related transactions, Definity’s ownership interest in McDougall will increase to approximately 78%.

Founded in 1965, Drayden is a leading Alberta insurance broker with approximately C$125 million (US$94.3 million) in annual premiums and strong operating margins. Through its insurance broker and government registry service operations, Drayden employs over 170 people across eight locations in the Edmonton area.

After closing of the Drayden transaction, McDougall will have over C$860 million (US$648.6 million) in annual premiums with 860 employees in 65 office locations. The transaction is expected to be immediately accretive to Definity’s operating ROE and operating earnings per share. Definity continues to hold significant financial capacity for future opportunities.

The acquisition is expected to close in the third quarter of 2023, subject to the fulfillment of customary closing conditions including provincial regulatory approval related to the change of control of Drayden’s registries business.

“The addition of Drayden will provide immediate scale and market leading presence outside of Ontario,” said Rowan Saunders, president and chief executive officer, Definity. “This acquisition reinforces Definity’s commitment to build our insurance broker platform into another billion-dollar business for Definity.”

“Drayden has an experienced management team, highly valued brands, a great culture and strong operational alignment with our existing broker operations,” stated Ross McDougall, chief executive officer, McDougall. “This transaction will give McDougall a unique opportunity to expand nationally and immediately establish a leadership position in Alberta’s insurance broker market.”

“We are excited about the opportunity to join the McDougall family given our common focus and shared values,” said Brian Nielsen, President, Drayden. “For our employees and customers this combination underpins our commitment to provide unrivalled service and supports continued investment in growing our business in Edmonton and the broader Alberta region.”

Source: Definity Financial Corp./McDougall Insurance Brokers

Topics Mergers & Acquisitions Agencies Canada