The Ardonagh Group Launches Mirror Notes Offering

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the notes, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

The Ardonagh Group (“the Group”) today announces the launch of a mirror notes offering of its $225 million 8.625% senior secured notes due 2023 (the “Notes”) under its existing Indenture. The issue price will be determined at the pricing of the mirror notes. The proceeds will be used to finance in part the purchase of Swinton (Holdings) Limited (“Swinton”), as announced on 27 September 2018*, and for general corporate purposes including acquisitions. The Group also today announces that it has entered into an agreement to acquire Minton House Group Limited (“MHG”), Health and Protection Solutions Limited (“HIG”) and Professional Fee Protection Limited (“PfP”) from HPS Investment Partners and Madison Dearborn Partners**. The purchase of MHG, HIG and PfP will be entirely equity funded.

The proceeds from the Offering will be held in escrow pending, among other things, regulatory approval for the acquisitions.

Swinton is a leading UK personal lines broker, with a focus on motor and home insurance and additional leadership positions in specialist lines including caravan, motorhome and motorbike. In 2017, Swinton reported turnover of £168 million, in excess of one million customers and 1.6 million live policies. 

MHG is a specialist education and care broker offering staff absence insurance products to the education sector. MHG insures approximately 2,000 schools in the United Kingdom along with a number of care groups and independent care homes. For the year ended December 31, 2017, MHG generated income of £5.1 million.

HIG is a healthcare specialist broker with a particular focus on UK SMEs, with a core product offering of UK personal medical insurance. HIG’s core product offering is UK personal medical insurance, with an SME portfolio of approximately £80 million annual premium income and an individual portfolio of approximately £23 million annual premium income. HIG generated a gross profit of £9.2 million in the year ended December 31, 2017.

PfP is a leading tax investigation fee protection MGA, distributing products through 1,500 accountants with access to approximately 500,000 SMEs. PfP has high retention rates of over 90% and has over 200 clients who have been with PfP for many years. For the year ended December 31, 2017, PfP generated income of approximately £4.5 million.

The Board believes these acquisitions to be highly complementary to The Ardonagh Group, providing both cost and revenue synergies once integrated.

Following completion of the acquisition of MGH, HIG and PfP, and in accordance with the provisions of the articles of association of the Group ("Articles") and the composite shareholders’ deed originally dated 2 April 2015, as amended and restated from time to time (the "Shareholders’ Deed"), an offer will be made to Look-Through Shareholders (as defined in the Articles and the Shareholders' Deed) to subscribe for convertible equity certificates on the same terms as those issued in connection with the acquisition of MGH, HIG and PfP and pro rata to their Look-Through shareholdings.

*subject to regulatory approval

** subject to a number of conditions including regulatory approval

Notes to Editors

Regulatory Notice

The Notes have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction. The offering of the Notes will be made only in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act  and outside the United States in offshore transactions in reliance on Regulation S under the Securities Act to persons other than retail investors in the European Economic Area, whereby a retail investor is defined as a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or (ii) a customer within the meaning of Directive 2016/97/EU (as amended, the “Insurance Distribution Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Directive 2003/71/EC (as amended, the “Prospectus Directive”). No approved prospectus within the meaning of the Prospectus Directive is required is connection with the offering of the Notes.

This announcement may contain inside information of the Group.

MiFID II professionals /ECPs only / No PRIIPs KID – Manufacturer target market (MIFID II product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs key information document (KID) has been prepared as not available to retail in EEA.

In the United Kingdom, this communication is directed only at (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order or (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”)) in connection with the issue or sale of any notes may otherwise be lawfully communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). In the United Kingdom, any investment activity to which this communication relates will only be available to, and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

Additional information concerning the Group has been posted to our investor relations webpage at www.ardonagh.com

For more information, please contact:

ardonagh@powerscourt-group.com