BP Marsh offloads MGA Sterling to Australia’s ATC

By Ryan Hewlett

June 5 - (The Insurer) - Australian MGA ATC Insurance Solutions has agreed to acquire fellow BP Marsh investee company Sterling Insurance, in a deal that increases the specialist UK insurance investor's stake in ATC to 27%.

ATC, Australia’s largest independent specialist MGA, will acquire 100% of the issued share capital of UK construction-focused general liability underwriter Sterling for a total consideration of A$33.2 million ($21.6 million).

BP Marsh said in a stock exchange filing on Thursday that ATC will fund the acquisition through a mixture of cash and equity.

London-listed BP Marsh had a shareholding of approximately 20% in Sterling and holds a 25% stake in ATC.

The venture capitalist’s consideration for its shareholding in Sterling will be settled via equity in ATC, valued at approximately 3.1 million pounds ($4.2 million). As a result, BP Marsh's shareholding in ATC will increase to 27%.

BP Marsh acquired the shares in Sterling in 2013 for 1.9 million pounds, representing an 8.8% internal rate of return over the 12-year investment period, with the group forecasting further uplift from its increased shareholding in ATC.

“BP Marsh identified the potential for an advantageous combination of these two investee companies, allowing senior members of Sterling's management team the chance to roll equity into ATC, thus enabling them to continue to participate in the combined group's high growth potential,” the company said in the stock exchange filing.

“Additionally, it also allowed some longstanding shareholders the opportunity to realise their investment in Sterling as part of this transaction.”

BP Marsh said the transaction demonstrates its “unique and flexible” approach to investing in the financial services sector, in terms of both size and structure.

ATC is 100% backed by A-rated Lloyd's capacity and is headed by managing director Chris Anderson. The MGA has budgeted to produce more than A$225 million of gross written premiums in its financial year to 30 June 2025, excluding the Sterling acquisition.

Shares in BP Marsh, listed on the AIM segment of the London Stock Exchange, rose more than 58% over 2024 and are currently trading at 647.49 pence apiece.

BP Marsh is expected to report results for the year to January 31, 2025 on June 10.