Howden Nears $10 Billion Acquisition of Risk Strategies, Targeting Stock Market Listing
British insurance broker Howden is on the verge of finalizing a $10 billion (£7.7 billion) acquisition of US-based Risk Strategies, according to a report from Sky News. Sources suggest this deal could pave the way for a stock market listing, potentially valuing the combined entity at over $30 billion (£23.2 billion).
A binding agreement is expected by the end of the month, with the purchase being partly financed through a share sale of approximately $4 billion (£3.1 billion), banking sources indicate. Initial reports about the potential deal emerged in February. Mubadala, the Abu Dhabi-based sovereign investment fund, and Hg Capital, an existing Howden shareholder, are anticipated to contribute around $2 billion (£1.5 billion) each in equity.
The new investment would value Howden at roughly $20 billion, implying a combined valuation of around $30 billion for the group.
This acquisition would be a significant move for Howden and its founder, David Howden, who has expressed interest in expanding into the US retail insurance market. A successful deal would position the company for a potential US stock market flotation within the next one to three years, with 2027 seen as the most likely date. Barclays and Morgan Stanley are advising Howden on the negotiations, while Evercore is acting for Kelso and Risk Strategies.
One source noted that the timeline for finalizing the agreement is not yet certain and could extend into next month. A Howden spokesperson declined to comment on the matter.
Focus on Organic Growth and M&A
Looking ahead, Howden has stated that it is continuing to prioritize organic growth, strategic mergers and acquisitions, and investment in talent and operational improvements. For the financial year ending September 30, 2024, the company reported a 23% increase in adjusted revenue to £3.01 billion, up from £2.44 billion in the previous year. Organic revenue growth was 15%, compared to 13% in fiscal 2023.
Meanwhile, adjusted consolidated EBITDA rose to £922.2 million, with the EBITDA margin remaining steady at 31%, down slightly from 32% the previous year. Howden also saw growth across its divisions, with insurance broking posting 14% organic revenue growth, and reinsurance increasing by 30%. DUAL, the company’s managing general agent division, reported 6% organic growth.
In February, the company acquired aviation specialist broker Forbes Insurance Limited and the book of business from Hill Aviation Insurance Services.
