The Barbados-based insurance company, Sagicor Financial Corporation Limited (Sagicor) says it has entered into a US$536 million arrangement agreement with the Canadian-based firm, Alignvest Acquisition II Corporation.
It said Sagicor shares will be acquired at a price of US$1.75 per share through a combination of cash and shares of the resulting entity with an aggregate value of approximately US$536 million.
Alignvest Acquisition II Corporation is a special purpose acquisition corporation that is listed on the Toronto Stock Exchange in May 2017 and raised, or received subscriptions for, an aggregate of C$565 million.
Alignvest has no current operations and this proposed business combination with Sagicor is intended to be its sole and only qualifying acquisition,’ SAGICOR said in a statement, noting that Sagicor’s current management team is rolling 100 per cent of their equity interest into the transaction.
“This transaction is transformational for Sagicor and fully supports our strategic agenda. We have come to work very closely with our partners at Alignvest and believe our combined expertise will continue to accelerate Sagicor’s growth strategy with improved access to capital.
“Our strategic vision remains consistent, and our actions continue to lead us on a path towards being a leading provider of world class insurance and financial services to meet the changing needs of our customers,” said Dodridge Miller, President and chief executive officer of Sagicor Financial Corporation.
The new board will consist of existing Sagicor directors and include several Alignvest-appointed directors “that bring deep global insurance and financial services experiences”
It will be chaired by Timothy Hodgson, the managing partner of Alignvest Management Corporation.
“We are extremely excited to be forming this partnership between Sagicor and Alignvest. Over the last 15 months, we have worked closely with Sagicor’s management team to better understand and embrace their business.
“We believe in their long-term shareholder value creating vision for the Company, and in their ability to be good stewards of our shareholders’ capital. Supplemented with the expertise and resources that Alignvest will bring to bear, Sagicor will have the capital and capabilities to accelerate the execution of their growth plans through the pursuit of near-term organic and inorganic growth initiatives.
“Sagicor and Alignvest look forward to working together to create and unlock shareholder value,” said Hodgson.
Sagicor said that cash will be used to support the cash option to shareholders and to fund growth.
“Cash not used to purchase Sagicor shares will be used to help accelerate organic growth and pursue industry consolidation.”
Shareholder approval is expected in the first quarter of 2019 and completion of this transaction is expected by the second quarter of the New Year.
The statement also announced that Sagicor and Alignvest will acquire Scotiabank’s life insurance operations in Jamaica and in Trinidad and Tobago and will also enter into a 20-year exclusive agreement where Sagicor will provide insurance solutions to Scotiabank’s clients in the two Caribbean countries.
“Sagicor expects that this transaction will increase annual net income by approximately US$30 million, upon closing. Closing is expected in 2020, subject to regulatory approval and certain conditions being met,” the statement added.
With over 175 years of history, Sagicor is a market leading provider of insurance products and related financial services in the Caribbean region, primarily Barbados, Jamaica and Trinidad and Tobago and the Eastern Caribbean.
It also provides life insurance and annuity products in the United States, as well as banking services in certain Caribbean countries.
Sagicor said that over the years, its net income has grown from approximately two million US dollars in 1990 to US$62 million for the 12 months ended December 31, 2017.
Alignvest’s parent company, Alignvest Management Corporation (AMC), is a leading Canadian alternative investment management firm that seeks to deliver superior risk-adjusted returns for its clients.
