Arachas, the largest insurance broker in the State, is set to buy Dublin-based marine insurance broker D&D Insurances for an undisclosed sum, as it continues to be a leading player in an ongoing consolidation of the sector.
D&D Insurances, led by chief executive Barry Donnellan, has been serving the Irish marine sector since 1986 and has long-established relationships with the key fishing ports and marine vessels around the State. It has four employees and had turnover of almost €640,000 last year, according to its latest set of accounts.
Following the deal and the expected closure next year of a previously-announced deal to buy family-owned Glennon Insurances in Dublin for an estimated figure of more than €90 million, Arachas will have more than 650 employees.
“Our strategy has always been to look to acquire well-managed companies, specialising in specific market sectors,” said Conor Brennan, chief executive of Arachas and of its parent group Ardonagh’s European operations. The deal “will deepen our existing credentials in the marine sector and expand insurance options for our customer base and also for D&D Insurances’ existing customers,” he said.
Arachas saw its net profit soar by 63 per cent last year to €22.9 million, fuelled by acquisitions as it continued to play a leading role in ongoing consolidating the market.
The wider Irish market has seen a flurry of broker deals in the past six years as it followed waves of consolidation in the UK and North America. The ultimate backers of most of the purchasing vehicles are private equity firms, attracted to a sector that is fee-based and delivers steady revenues through the economic cycle. This allows buyers to service the debt needed to finance further deals.
Ardonagh, which acquired Arachas in 2020 for €250 million, is backed by US private equity firms Madison Dearborn and HPS Partners.
Last year saw Arachas buy Mayo-based MCM Insurance Brokers, which is focused on the construction, hospitality and professional indemnity sectors, BJP Insurance in Dublin and Kilkenny-based fintech Orange Bear Consultancy for undisclosed sums.
It also took over the assets of Waterford-based Hooper Dolan at the start of this year in a deal believed to be worth more than €60 million.