The private equity arm of Ontario Teachers’ Pension Plan is getting into the insurance brokerage business by taking a majority stake in a U.S. firm that invests in independent brokers.
The pension giant announced Tuesday that its private investment department, Teachers’ Private Capital, has entered into a definitive agreement to take a majority interest in Columbus, Ohio-based BroadStreet Capital Partners, a U.S. holding company that takes majority stakes in independent insurance agencies. Terms of the transaction are not being disclosed.
Along with another private equity firm, Century Capital Partners, Teachers’ is to acquire approximately 84% of BroadStreet from State Automobile Mutual Insurance Co. The remaining share of the company will be retained by State Auto and BroadStreet CEO, Rick Miley.
BroadStreet is focused on the middle-market retail insurance brokerage industry in both commercial and personal P&C insurance. It ranks among the top insurance agencies in the U.S., with annual revenue in excess of US$100 million.
“BroadStreet has developed an attractive business model and a proven ability to create value in a highly fragmented market,” said Jane Rowe, senior vice-president, TPC. “With our partners Century, we look forward to supporting BroadStreet’s strong leadership team as it continues to pursue attractive growth opportunities.”
“We are very pleased to have the support of investors of the quality of Teachers’ and Century, as well as the on-going support of our founding partner State Auto,” said Miley.
In addition to their initial equity investment, Teachers’ and Century have also committed to provide follow-on capital to support future investments by BroadStreet.