Latin American and Caribbean-focused financial services company Sagicor Financial Corp agreed to a USD536 million takeover from Alignvest Acquisition II Corp on Tuesday.
Alignvest Acquisition II Corp is a special purpose acquisition corporation, listed on the Toronto stock exchange, and has no current operations. Sagicor will be its only acquisition. Its parent company - Alignvest Management Corp - is a Canadian alternative investment management firm.
Alignvest will acquire Sagicor shares at USD1.75 each through a combination of cash and shares.
Sagicor shares in London were untraded Tuesday but last closed at 82.50 pence each, about USD1.05. Sagicor's last closing price gives the firm a market capitalisation of GBP252.9 million, or USD322.4 million.
"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," said Dodridge Miller, President & CEO of Sagicor.
Shareholder approval is expected in the first quarter of 2019 and completion of the transaction is expected late in the first quarter or second quarter of 2019.
Sagicor said the deal will "unlock significant value" for shareholders in several ways: including a potential listing in Toronto - which will "provide access to a liquid exchange market".
Also, any cash not used to purchase Sagicor shares will be used to "help accelerate organic growth".
Upon closing of the transaction, the board is expected to consist of the existing Sagicor board and several Alignvest-appointed directors.
Sagicor and Alignvest will acquire Canadian commercial bank The Bank of Nova Scotia's Jamaican and Trinidad & Tobago life insurance operations.
As part of the acquisition The Bank of Nova Scotia, trading as Scotiabank, will enter into a 20-year exclusive agreement to provide insurance solutions to Scotiabank clients in Jamaica and Trinidad & Tobago.
Sagicor said the Scotiabank deal is expected to increase annual income by about USD30 million.
The deal is expected to close in 2020, subject to regulatory approval and certain conditions being met.
Miller added: "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."
By Paul McGowan; paulmcgowan@alliancenews.com
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