Sovereign Capital Partners has divested its majority stake to two private equity firms
Sovereign Capital Partners has divested its majority stake in Irish commercial lines broker Arachas, selling out to private equity backers Madison Dearborn Partners and HPS Investment Partners; the two firms also own UK broker Ardonagh.
Sovereign stated that it received 5.5 times its investment upon exiting the three-year partnership with Arachas.
Sovereign initially backed SME-focused Arachas’ management buyout (MBO) in early 2017.
During the investment period, Arachas made four acquisitions, including Capital Cover Group, Kidd Insurances, Covercentre and Murray and Spelman – this acquisition trail was designed to develop the firm’s service offering and distribution channels, as well as extend its geographical footprint.
Arachas currently employs around 240 staff across offices in Dublin, Cork, Kildare and Waterford.
The transaction is pending regulatory approval.
‘Expansion and development’
Conor Brennan, chief executive at Arachas, said: “This has been a fantastic period of expansion and development for the group.
“Sovereign has been a highly supportive investor, providing both financial and strategic capability. Together, we made a series of high-quality acquisitions and delivered strong organic growth supported by significant investment into the company’s IT systems and data analytics capability.
“We are well positioned to continue to flourish in what is an exciting insurance market.”
Alex Hay, partner at Sovereign, added: “We are delighted to have partnered this highly respected management team to support the transformational growth of Arachas in the Irish market.
“The business has achieved exceptional organic and strategic growth in the last three years, [while] remaining focused on delivering a consistent and first-class customer experience.”