PSC Insurance : Capital Raising

For personal use only

11 March 2022

Market Announcements Office

ASX Limited

Exchange Centre

20 Bridge Street

SYDNEY NSW 2000

PSC INSURANCE GROUP LTD (PSI) - CAPITAL RAISING

PSI advises that it has received binding commitments for a capital raising via a placement of 17,777,778 fully paid ordinary shares (Shares) to selected institutional and sophisticated investors to raise $80 million at $4.50 per Share (representing a 5.3% discount to the closing price on 9 March 2022) (Placement). The Joint Lead Managers were Bell Potter Securities and E&P Corporate Advisory.

PSI appreciates the show of support and confidence in the Group and its strategy.

The Shares will be issued under the Placement on 16 March 2022 and will rank equally with all Shares on issue. The Placement will be made under PSI's existing capacity under Listing Rule 7.1 and accordingly will not require shareholder approval.

PSI provides a market update as follows:

• The funds will be used over time to assist with the funding of acquisitions in accordance with our growth strategy. We anticipate that funds will be deployed in a similar manner to the funds raised in November 2020.
• Since January 2021, the Group has completed 12 acquisitions for an aggregate base purchase price of $119m and contributing $16m in additional EBITDA on an annualised basis.
• The Group is well within its stated gearing threshold of a net leverage ratio1 range of 2.0-2.5 times. Based on our FY22 guidance, the current net leverage ratio is at 2.1-2.3 times.
• Following full deployment of this equity capital, we anticipate an estimated pro-forma net leverage ratio range of 1.9-2.0 times.
• The recently upgraded debt facilities have ~$90m in available limits and this provides the Group a subsequently strong medium-term platform to assist with our growth.
• The Group has a good pipeline of acquisition opportunities. In particular, we are considering acquisitions of UK and Australian commercial broking businesses, with a number under due diligence.

The attached presentation provides further details of the Company's acquisition strategy and proposed use of funds from the Placement.

1 Debt + Vendor Debt - Cash + $20m working capital "float"

PSC Insurance Group Limited ACN 147 812 164

96 Wellington Parade, East Melbourne, Victoria 3002 | W www.pscinsurancegroup.com.au

For personal use only

Please direct any queries to Tony Robinson, Managing Director, on 0407 355 616 or Joshua Reid, Chief Financial Officer, on [phone].

Authorised for release by the PSC Insurance Group Board.

Stephen Abbott

Company Secretary

Forward looking statements

This announcement contains forward-looking statements, which address a variety of subjects including statements regarding expected growth rates and financial results. Statements that are not historical facts, including statements about our beliefs, plans and expectations, are forward-looking statements. Such statements are based on our current expectations and information currently available to management and are subject to a number of factors and uncertainties, which could cause actual results to differ materially from those described in the forward-looking statements. The Company's management believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or the ASX Listing Rules. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events and developments to differ materially from our historical experience and our present expectations or projections.

PSC Insurance Group Limited ACN 147 812 164

96 Wellington Parade, East Melbourne, Victoria 3002 | W www.pscinsurancegroup.com.au

ersonal use only

2 0 2 2

CAPITAL

RAISING

10th March 2022

| PSC Insurance Group | March 2022 Capital|Raising1 PSC Insurance Brookers UK will be new trading name for one commercial broking businesses (Turners, Absolute, Abaco, Trust)

SHARE OFFER SUMMARY

Positioning the Group to execute M&A strategy

onlyTHE OFFER

useInstitutional Placement of $80 million at an Offer Price of $4.50 per share.

ersonal2

USE OF FUNDS

• To assist with the execution of M&A in line with Group strategy. Key areas of deployment remaining Australian and UK commercial broking.
• Maintain current debt levels reflecting global market volatility.

OPERATING

PERFORMANCE

• 1H performance was very strong with underlying EBITDA increase of 42% to 1H contribution of $41m. Organic growth was 20% and the acquisitions have all performed well.
• FY22 guidance upgraded to an underlying EBITDA range of $87-92m and underlying NPATA of $57-61m.

TRACK RECORD

• $70m raised in CY 2020 successfully deployed.
• Average blended multiple of ~ 7.5x EBITDA.

| PSC Insurance Group | March 2022 Capital Raising

The Group net leverage ratio* is currently ~ 2.1-2.3times, based on our FY22 underlying EBITDA, within our target range of 2.0-2.5times. This raising will enable us to execute on our strategy whilst not increasing debt in uncertain times.

$85.7m of capital has been deployed and $32.9m remains payable, which will be paid largely via the Group's expanded debt facility and existing cash balances.

$70m ($60m Placement and $10 underwritten DRP) in equity capital raised in Q2 of FY21. Main acquisitions since this time have been Absolute, Abaco and Trust (all UK commercial brokers) and Alliance Insurance in Australia.

Since January 2021, the Group has completed 12 acquisitions with purchase price of $118.6m and $15.9m of expected EBITDA (~ 7.5x multiple).

ACQUISITION SUMMARY - 2021

2020 Capital of $70m Successfully Deployed

onlyuse

ersonal* Debt + Vendor Debt - Cash Balance + $20m working capital "float" 3

A$m	Trust	Abaco	Absolute	Alliance	Others	Total
Purchase Price	27.9	42.8	13.4	23.9	10.6	118.6
EBITDA	4.5	4.0	2.1	3.3	2.0	15.9
Paid	18.9	30.4	11.1	18.1	7.2	85.7
Payable	8.9	12.4	2.4	5.8	3.4	32.9