Gjensidige Forsikring acquires Buysure in $40.4 million deal

By Aidan Gregory

March 11 - (The Insurer) - Gjensidige Forsikring has struck a deal to acquire home ownership insurer Buysure and its subsidiary Claims Handling for 430 million crowns ($40.4 million), the Norwegian insurer said on Tuesday.

Gjensidige said the acquisition of Buysure would strengthen its market share in home buyer and seller insurance in Norway, a market worth 2 billion crowns in 2024, and enable cross selling of other products to Buysure’s customers.

Through the deal, Gjensidige said it has secured five-year agreements with estate agents covering around 20% of the country’s annual private real estate sector transactions. It expects to make 500 million crowns via this network going forward.

The deal, which is subject to regulatory approval, is expected to close in April 2024. It is expected to reduce Gjensidige’s solvency ratio, which stood at 185% at the end of December, by around 4 percentage points.

At an enterprise value of 430 million crowns, Gjensidige is paying around 12.6 times 2024 earnings for Buysure, according to analysts at KBW.

“This is a surprising move, in our view, considering that the group's growth ambitions are focused on Denmark, rather than their local market,” said KBW, in a note on Tuesday. “Buysure offers change of ownership insurance through a network of real estate agents in Norway.

“In general, this is a small transaction that we guess was opportunistic in nature,” added KBW. “The earnings accretion is seen as very limited.”

Shares in Gjensidige were trading at 230.40 crowns as of 1.52 p.m. in Oslo on Tuesday, up 0.6% from the previous close, following the announcement of the Buysure acquisition. The stock has gained more than 36% over the past year, giving Gjensidige a market capitalisation of 115.2 billion crowns on the Oslo Stock Exchange.