McDougall expands into Alberta through M&A

With McDougall Insurance Brokers now within the Definity fold, the brokerage has made a splash in the merger game, cutting a deal to acquire Alberta-based Drayden Insurance.

McDougall announced it has entered into a definitive agreement to acquire 100% of Drayden for $208 million, subject to adjustments. The transaction will be funded by Definity, through McDougall, using a combination of excess capital and debt.

The acquisition is expected to close in 2023 Q3, subject to regulatory approvals (including provincial approval of the change of control of Drayden’s registries business). After accounting for all related transactions, Definity’s ownership interest in McDougall will increase to approximately 78%.

“The addition of Drayden will provide immediate scale and market-leading presence outside of Ontario,” Definity president and CEO Rowan Saunders said of the deal. “This acquisition reinforces [our] commitment to build our insurance broker platform into another billion-dollar business for Definity.”

Related: McDougall-McFarlan merger just the beginning for Definity

Founded in 1965, Drayden is a leading Alberta insurance broker with approximately $125 million in annual premiums. Through its insurance broker and government registry service operations, Drayden employs more than 170 people across eight locations in the Edmonton area.

Drayden is a large-scale, full-service independent insurance broker in Alberta. It offers coverage in a variety of different segments, both in personal and commercial lines, including life insurance, business insurance, boat insurance, home insurance, condo insurance, renters insurance, farm insurance, and personal lines auto and property insurance.

“We are excited about the opportunity to join the McDougall family given our common focus and shared values,” said Drayden president Brian Nielsen. “For our employees and customers, this combination underpins our commitment to provide unrivalled service and supports continued investment in growing our business in Edmonton and the broader Alberta region.”

The deal is expected to increase Definity’s earnings from distribution by over 25%, with an immediate impact on Definity’s operating return on equity (ROE) and earnings per share.

“Drayden has an experienced management team, highly valued brands, a great culture and strong operational alignment with our existing broker operations,” McDougall CEO Ross McDougall said of the deal. “This transaction will give McDougall a unique opportunity to expand nationally and immediately establish a leadership position in Alberta’s insurance broker market.”

After closing the Drayden transaction, McDougall will have over $860 million in annual premiums with 860 employees in 65 office locations.

 

Feature image courtesy of iStock.com/AscentXmedia