Australia’s PSC expands in Asia with two HK deals

April 20 2020 by Yvonne Lau

Australia’s PSC Insurance Group (PSC) has moved ahead with its Asia expansion through the acquisition of two Hong Kong-based brokers Charter Gilman and Globe Insurance.

The total transaction value is A$3 million (US$1.89 million).

PSC will now hold 50% of Charter Gilman’s share capital – which, including its A$1.01 million (US$670,337) stake it purchased last year – means the group will take control of the Hong Kong brokerage. Its initial foray into Hong Kong will be a springboard to help the company test out opportunities in Asia.

PSC chairman Brian Austin commented: “PSC believes the Asian market presents an outstanding long-term opportunity for the company. These acquisitions provide an opportunity to enter the market via Hong Kong through existing known businesses.”

At an April shareholders meeting, the acquisition of broking firm Globe Insurance was also approved – the deal will be conducted via Charter Gilman as PSC takes full control of the company.

Austin acknowledged that while the investments by the group are modest, they fully expect that further investments of similar size will help them build scale in the short to medium term. He added: “The company believes this can form a foundation of a business unit that can provide a sound contribution to group results.”

Indeed, it has been the group’s focus on acquisitions that has bolstered its earnings — its previous year acquisitions boosted its FY 2019 results. The Australian-listed broker recorded a 31% increase in underlying earnings in core business to A$18.8 million (US$12.45 million) in the six months ended December 31 2019 (the first half of its fiscal year). Its 2019 acquisitions contributed approximately A$7.1 million (US$4.7 million) to this growth.

PSC Insurance Group has announced that they “remain committed to our guidance for the full year as indicated at our annual general meeting being an underlying EBITDA of over A$57 million (US$36 million).”

The company expects to hit its earnings targets and will provide an earnings update in May. They control over A$1.5 billion (US$1 billion) of premiums globally.

Time will tell how ambitious their Asia plans will become.

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