Steadfast lodges IPO prospectus

MEDIA RELEASE 1 July 2013 Steadfast lodges IPO prospectus Opportunity to invest in Australia s largest insurance broking network Steadfast Group Limited (ACN 073 659 677) (Steadfast) has lodged a prospectus for an initial public offering (IPO) and listing on the Australian Securities Exchange (ASX) with the Australian Securities and Investments Commission. Steadfast is a provider of services to a network of approximately 280 insurance broking businesses across Australia. Following listing, Steadfast will operate as both a broker cluster group for Steadfast Network Brokers and a consolidator group through its ownership interests in a number of independently managed insurance broking businesses. The IPO will be offered to certain investors at an indicative price range of $1.00 to $1.20 per IPO share with an expected market capitalisation of $545 million to $622 million. The prospectus is available in electronic form at www.steadfast.com.au. Eligible investors should consider the prospectus and read it in full (including the replacement prospectus with the final size of the public offering to be lodged on 11 July 2013) in deciding whether to acquire Steadfast shares. If you want to acquire shares, you must complete the relevant application form in, or which accompanies, the prospectus. The offer will consist of an Institutional Offer, a Stockbroker Firm Offer, a Priority Offer, and a Board s List Offer. The Board s List Offer is open to certain Retail Investors nominated by Steadfast. The final price per IPO share will be determined at the conclusion of a book build process on or around 30 July 2013. The final price may be set within or above the indicative price range of $1.00 to $1.20 per share. The IPO is conditional on achieving a final price of at least $1.00, ASX granting conditional listing approval and final Board approval. Upon listing, key management personnel and employees of the businesses within the Steadfast Network are expected to hold approximately 43-47% of the shares in Steadfast, re-affirming their commitment to the business and its future success. Key highlights Largest insurance broker network by Gross Written Premiums (GWP) written and number of brokers in an resilient industry with a stable underlying earnings profile Ownership interests post-ipo in a diverse group of brokers with aggregate GWP of nearly $1 billion in the year ended 30 June 2012 Benefits of scale post-ipo as one of Australia s largest insurance broker cluster / consolidator groups Multiple revenue growth opportunities organically and through acquisitions Fixed cost leverage in underlying businesses Experienced Board and management team Conservative balance sheet to support future growth potential 1

Co-ownership Model The IPO will facilitate the completion of acquisitions by Steadfast of equity interests in a number of insurance broking businesses, underwriting agencies, and ancillary services businesses. The acquisitions will transform Steadfast, enabling it to facilitate succession planning within the network through a co-ownership model whilst at the same time continuing to provide the whole network of insurance brokers with access to the services that have made Steadfast the largest network in Australia. Following listing, Steadfast will have operations spanning four key lines of business, all of which are in the insurance intermediaries and ancillary services segment: 1. Insurance broking: Steadfast will have an equity interest in 62 insurance broking businesses (referred to as Steadfast Equity Brokers) and continue to provide support services to all of the Steadfast Network Brokers, of whom the Steadfast Equity Brokers are a subset 2. Insurance underwriting agencies: Steadfast will have ownership interests in four insurance underwriting agencies, which develop and market insurance products in niche segments 3. Premium funding: Steadfast will retain its 50% shareholding interest in Macquarie Premium Funding, one of the largest originators of premium funding products in the Australian market 4. Ancillary services: Steadfast will acquire equity interests in two ancillary services businesses, which have operations aligned with Steadfast s business model and objectives. The offer is being conducted to: Provide Steadfast with a liquid market for its Shares and an opportunity for others to invest in Shares of Steadfast Part fund the IPO Acquisitions Enhance Steadfast s financial flexibility to pursue the growth opportunities through improved access to capital markets Repay Steadfast s outstanding bank facilities and fund the costs associated with the Offer and the Restructure Proposal The Listing also provides Existing Shareholder Brokers with an opportunity to realise part of their investment in Steadfast (subject to escrow restrictions). Steadfast Managing Director & CEO, Robert Kelly commented; Lodging a prospectus is a significant milestone and this is an exciting time for Steadfast. Steadfast benefits from the strong support of our brokers, operates in an resilient industry where there are stable and profitable growth opportunities, and will benefit from a strong balance sheet which will stand us in good stead for growth as an ASX listed company. 2

Board and Senior Management Mr Frank O Halloran AM, is the Non-Executive and independent Chairman of the Steadfast Board. Each of the Directors has at least 30 years experience in the financial services industry, with a combined depth of experience in the insurance industry. The senior management team is led by Managing Director & CEO, Robert Kelly, who is the cofounder of Steadfast and has over 44 years of experience in the general insurance and insurance broking industries. Steadfast Broker Network Steadfast will continue to provide services to support insurance broking businesses within the Steadfast Network. It will seek to expand the scale of the Steadfast Network and strive to attract new brokers to the network and to enable the network to provide professional service and advice to their clients. Steadfast s ethos Strength when you need it will remain anchored by its determination to deliver a suite of products and services that are innovative, dynamic and best in class, and are available only to the Steadfast Network. Steadfast s organic growth opportunities include the ability to cross-sell products and services, leveraging a growing industry, supporting the growth and development of Steadfast Network Brokers, and through enhanced relationships with Strategic Partners, being major insurers and premium funders. The Steadfast Network relies on the well-established relationships between Steadfast and its Strategic Partners. The Steadfast Network in turn provides an attractive distribution channel for Strategic Partners, particularly in offering products to customers in the small to medium enterprise (SME) segment. Other information J.P. Morgan and Macquarie Capital are acting as Joint Lead Managers to the Steadfast IPO. King & Wood Mallesons is acting as legal adviser and KPMG Transaction Services is acting as investigating accountant. See key dates and key offer statistics overleaf. For more information: Jim Kelly FTI Consulting jim.kelly@fticonsulting.com 0412 549 083 02 8298 6100 Justin Clark FTI Consulting justin.clark@fticonsulting.com 0429 361 117 02 8298 6100 3

NOTES TO EDITORS Background Steadfast was established in April 1996 to assist independent insurance brokers through the provision of support services and specialist tools designed to improve the professionalism, quality of service and access to product of independent insurance brokers. The network of insurance brokers serviced by Steadfast (collectively referred to as the Steadfast Network) has today grown to become the largest general insurance broking network in Australia, measured by annual premiums placed. Brokers in the Steadfast Network primarily cater to the small to medium enterprise (SME) segment of the insurance broking market and placed gross written premiums (GWP) of approximately $3.7 billion in total in the year ended 30 June 2012. Steadfast has predominantly operated throughout its history as a provider of services to its network of insurance brokers approximately 280 insurance brokers in recent years. Executive Management The senior management team is led by Managing Director & CEO, Robert Kelly, who is the cofounder of Steadfast and has over 44 years of experience in the general insurance and insurance broking industries. Cameron McCullagh is Steadfast s Chief Operating Officer, Stephen Humphrys is the Chief Financial Officer, Allan Reynolds is the Executive General Manager, Samantha Hollman is the Executive General Manager Strategic Projects; and Linda Ellis is Group Company Secretary & General Counsel. The senior management team has extensive corporate experience across the fields of general insurance, insurance broking, professional services and financial management. Key risks As with all companies, Steadfast is subject to a range of risks, which are more fully detailed in Section 5 of the Prospectus. Key risks to the business include: risks associated with the change in business model; the potential for a reduction in commission rates, advice fees and marketing & administration fees (referred to as M&A Fees); the write down of intangibles from one or more of its acquisitions; the loss of key employees from the business (including Steadfast Equity Brokers); a reduction in the volume of insurance written in the Australian general insurance market (particularly the SME segment); a change or disruption in market structure or dynamics (for example, an increase in competition or the entry of new market participants); and the withdrawal of capacity by underwriters. If any of these key risks or other material risks eventuate, it may have an adverse impact on Steadfast s earnings. Other key risks relate to the significance of the change in business model and the schedule for release of a large proportion of Shares from escrow shortly after completion of the Forecast Period. 4

Key Dates 1 Prospectus lodgement date Friday, 28 June 2013 Replacement Prospectus lodgement date with final number of Thursday, 11 July 2013 Consideration Shares 2 Retail Offer period opens Thursday, 11 July 2013 Retail Offer period closes Board s List Offer and Priority Offer Wednesday, 24 July 2013 Retail Offer period closes Stockbroker Firm Offer Friday, 26 July 2013 Bookbuild to determine Final Price Tuesday, 30 July 2013 Commencement of trading on ASX on a conditional and Friday, 2 August 2013 deferred settlement basis Settlement Tuesday, 6 August 2013 Allotment of IPO Shares Wednesday, 7 August 2013 Completion of the IPO Acquisitions 3 and issue of Consideration By Friday, 9 August 2013 Shares, Re-weighting Shares and Executive Shares Commencement of trading on ASX on a normal settlement basis Wednesday, 14 August 2013 Key Offer Statistics Indicative Price Range 4 $1.00 to $1.20 per IPO Share Total IPO Shares to be issued under the IPO 5 134 million to 469 million Market capitalisation 6 $545 million to $622 million Enterprise value 7 $506 million to $583 million Price to FY14 earnings ratio (NPATA basis) 8 14.4x to 16.5x Enterprise value / FY14 EBITA 9 8.4x to 9.6x 4.7% 1 This timetable is indicative only and may change without notice. Unless otherwise indicated, all times are stated in Sydney time. The Joint Lead Managers, by agreement with Steadfast, reserve the right to vary the dates and times of the Offer, including to extend the Closing Date, close the Offer early or accept late Applications (either generally or in particular cases and without notifying any recipient of this Prospectus or Applicants) and Steadfast may withdraw the Offer at any time before the Shares are issued, at its discretion. Investors are encouraged to submit their Applications as soon as possible after the Opening Date. 2 Vendors who are Wholesale Recipients will be permitted to finalise their Consideration Share Elections between 6 July 2013 and 9 July 2013. The Replacement Prospectus is expected to be lodged with ASIC on or around 11 July 2013 which will confirm the final number of Consideration Shares to be issued. 3 There is a risk that some of the Acquisitions do not complete. Steadfast will proceed with the IPO provided that Acquisitions representing at least 93% of the aggregate purchase price of all Acquisitions complete refer to Section 4 of the prospectus for further information. 4 The Indicative Price Range is the indicative range for the Final Price. The Final Price may be set within or above the Indicative Price Range (refer to Section 7.6.3 of the prospectus). The Offer will not proceed if a Final Price of at least $1.00 is not achieved. Shares may trade below the lower end of the Indicative Price Range. 5 The total number of IPO Shares to be issued will depend on the Indicative Price Range and the final elections made by relevant Vendors after the date of this Prospectus as to whether they wish to receive cash (which will be funded through the issue of IPO Shares), Consideration Shares (which will be issued at the notional price of $1.00 per Consideration Share) or a combination (refer to Section 7.8 of the prospectus for further information). As the total number of IPO Shares to be issued is dependant on these factors, only ranges of numbers can be disclosed in the Key Offer statistics and throughout this Prospectus. The Replacement Prospectus is expected to be lodged with ASIC on or around 11 July 2013 which will confirm the final number of Consideration Shares to be issued and will remove references to certain ranges (as the context requires). 6 The minimum market capitalisation is based on the lower end of the Indicative Price Range ($1.00 per IPO Share), which results in 545 million Shares being on issue on completion of the Offer. The maximum market capitalisation is based on the upper end of the Indicative Price Range ($1.20 per IPO Share), multiplied by 518 million Shares on issue which assumes maximum Consideration Share Elections of approximately 80% by Vendors. If Shares trade below the lower end of the Indicative Price Range ($1.00 per IPO Share) after Listing, the market capitalisation may be lower. 7 Calculated as each of the minimum and maximum market capitalisation figures of Steadfast, less Steadfast s pro-forma net cash as at 31 December 2012 of $48.6 million, plus $9.2 million of non-controlling interests. Net cash is calculated assuming $70.4 million of cash not held on trust, minus $15.0 million in cash to be spent on restructure and listing costs and minus $6.8 million of debt on listing. Section 4.9 of the prospectus provides further information. 8 The minimum price to FY14 earnings ratio (NPATA basis) is based on the lower end of the Indicative Price Range ($1.00 per IPO Share), which results in 545 million Shares being on issue on completion of the Offer. The maximum price to FY14 earnings ratio (NPATA basis) is based on the upper end of the Indicative Price Range ($1.20 per IPO Share), and 518 million Shares on issue which assumes maximum Consideration Share Elections of approximately 80% by Vendors. 9 Calculated as the expected enterprise value of Steadfast (see footnote 7), divided by Pro-forma Forecast EBITA. This valuation multiple represents a valuation metric that may enable investors to assess the valuation of comparable businesses before the impact of amortisation and different capital and taxation structures. 5