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Johannesburg - Sanlam [JSE:SLM] has concluded agreements whereby Sanlam Life Insurance, the largest operating subsidiary of Sanlam, will acquire a 53% stake in life insurance provider, BrightRock.
It will be done through a combination of a share subscription and the purchase from various management shareholders and Correlation Investments.
The total consideration is dependent on the effective date of the transaction and is expected to be a maximum of R707m should the effective date occur in the first half of 2017. Sanlam will fund the acquisition from available discretionary capital.
According to Sanlam, the BrightRock group offers individualised, needs-matched life insurance cover that is built around a client's needs and is designed to change as a client's needs evolve.
BrightRock was launched in the intermediated, individual risk market in 2012 and has since grown rapidly, establishing a strong market presence, explained Sanlam.
The transaction is in line with Sanlam's strategy to seek profitable and sustainable growth opportunities to invest in South Africa. In terms of the transaction agreement, Sanlam and BrightRock will retain their own brands, life insurance licences and management teams.
BrightRock products are currently sold solely through independent brokers, but the product range will in future also be available through Sanlam Financial Advisers. Sanlam believes this places it in a strong position to further grow of its market share, while BrightRock gains a growth partner that is supportive of its aspirations to grow into a highly differentiated financial services business of scale.
The implementation of the transaction remains subject to the fulfilment of a number of suspensive conditions, including, inter alia, the receipt of all necessary regulatory approvals.
The effective date of the transaction will, therefore, be dependent on the fulfilment of the suspensive conditions.
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