Sagicor Financial Company has acquired a Canadian life insurance firm for a fraction of its CDN$1.6-billion value.
Wilton Re sold Ivari to Sagicor for CDN$375 million, which is less than a quarter of its current book value. Wilton Re itself was reported to have acquired Ivari eight years ago, in 2015, for about some CDN$600 million.
“Adding Ivari immediately enhances our earnings generation, expands our asset base in a highly rated investment grade jurisdiction, and provides an attractive avenue for growth,” said Sagicor Financial President and CEO Andre Mousseau in a statement announcing the acquisition.
The purchase was funded by a syndicated US$320-million senior secured term-loan facility backed by international and Canadian banks.
“Sagicor may opt to replace or refinance this term loan with debentures issued in the debt capital markets or other financing sources, in whole or in part, if and when appropriate, consistent with its capital allocation strategy,” the company said.
Ivari holds assets of CDN$12.1 billion, down from CDN$13.9 billion in 2021, however, its net worth or capital improved to CDN$1.6 billion from CDN$1.4 billion in the same period.
Its earning in 2022 amounted to CDN$10.5 million, marking a substantial climb down from profit of CDN$73.7 million the previous year.
Mousseau said in regards to the transaction that Sagicor would file a business acquisition report on SEDAR+, the official website for market releases in Canada, by December 17.
Requests for comment were unanswered by Sagicor.
Sagicor, which operates in multiple markets within the Caribbean as well as the United States, was acquired by Canada-based private equity investors in 2019 utilising a vehicle called Alignvest. The regional insurer was renamed from Sagicor Financial Corporation Limited to Sagicor Financial Company Limited and listed on the Canadian stock market.
Headquartered in Toronto, Ivari services over 700,000 policyholders across Canada and has approximately 300 employees.
“Ivari is a great fit; its product portfolio aligns with our strength in individual life insurance, their team’s strong culture mirrors ours, and it is financially attractive,” Mousseau said.
Ivari’s capital surpasses regulatory requirements. Its core capital, at 103.5 per cent, is twice as high as the minimum requirement of 55 per cent, while its total capital ratio, at 145 per cent, is tracking well ahead of the 90 per cent minimum set by Canadian regulators.
In August, in anticipation of the acquisition, Fitch rating agency downgraded Ivari by one notch from ‘A’ to ‘-A’, saying the rating would now mirror its new and “weaker parent”.
Sagicor Financial’s holds equity of US$777 million, up from US$726 million at year ending December 2022.