QBE sells US businesses for $US300m

QBE Insurance Group has entered into an agreement for the sale of its US agency businesses to California-based Alliant Insurance Services for $US300 million ($A367 million).

The sale of the insurance provider’s US businesses, which include Community Association Underwriters, Deep South and SIU, includes an up-front cash payment of $US217 million, with the outstanding amount to be paid by way of a performance-based earn-out agreement over the next five years.

“An important element of the sale is the long-term agreement that we have entered into to retain the underwriting business provided by the agencies,” QBE chief executive John Neal said.

The total potential sale consideration represents an earnings before interest, tax, depreciation and amortisation multiple of around 12.

The sale is expected to close in early February.

QBE’s share price rose 0.7 per cent to $10.62 per share at 9:50am.