Sagicor Financial buys Canadian life insurer
Barbados-based regional insurance company Sagicor Financial Company Limited, SFC, has announced its purchase of ivari, a Canadian individual life insurer, in a C$325-million deal.
The acquisition, Sagicor Financial said in a release, is part of its geographical expansion and growth acceleration. It expands SFC’s offering of financial services into Canada and, generally, in the North American market.
Toronto-based ivari, an eight-year-old business with approximately 700,000 policyholders across Canada and more than 250 employees, is reported to be the second-largest provider of universal life insurance in Canada and is said to add C$13.9 billion (US$10.7 billion) to SFC’s existing assets, which last year were valued at over US$20 billion.
The Caribbean insurer, which collected US$2.6 billion in total gross premium revenue in 2021, described the ivari deal as a “transformational acquisition” of a company that’s scalable for growth.
“Sagicor Financial has entered into a definitive agreement to acquire ivari, a subsidiary of Wilton Re Limited, subject to the satisfaction of customary conditions, including required regulatory approvals. The expected consideration, to be paid in cash at closing, is C$325 million, subject to certain adjustments,” the company said in a release.
The transaction is expected to close in six to 12 months. It noted that the purchase price reflects new capital that is to be injected into the Canadian firm before the deal is closed and assumes funding at ivari’s current target total capital ratio that will come into force in January next year.
“The acquisition of ivari transforms Sagicor into a leading North American insurer serving the middle market. The acquisition of ivari aligns with Sagicor’s business strategy of growing in individual life insurance and diversifying into adjacent geographic markets,” said SFC Group President and CEO Dodridge Miller.
“It is a scaled business primed for growth, with C$13.9 billion in well-managed assets as of year end 2021 and a dedicated and focused management team. Through this acquisition, Sagicor will double the size of its balance sheet and deliver its over 180 years of experience in individual life insurance to the Canadian market,” Miller said.
The acquisition is expected to be financed through cash and new debt. SFC said it had a commitment for up to US$320 million of new debt financing in the form of a five-year senior secured loan.
“On a pro forma basis, Sagicor would have over US$20 billion of combined total assets and approximately US$2.6 billion of annual total gross premium revenue as of year end 2021. As part of its capital management strategy, 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,” the Barbados-based company noted.
Sagicor Financial’s business includes life, health and general insurance; banking; pensions management; annuities; and real estate.