Sagicor Financial Corporation Limited is looking to sell all its shares to the Toronto-based Alignvest Acquisition II Corporation, in a US$536 million deal.
The insurance company, which is listed on the Barbados, Trinidad and Tobago and London Stock Exchanges, announced on Tuesday that it has entered into an agreement with Alignvest in which the Canadian company will acquire all the shares of Sagicor at a price of US$1.75 per share.
Alignvest is a special purpose acquisition corporation that listed on the Toronto Stock Exchange in May 2017 and raised, or received subscriptions for, an aggregate of CAN$565 million. It has no current operations and the proposed business combination with Sagicor is intended to be its sole and only qualifying acquisition, a statement from Sagicor said.
“The completion of this arrangement is dependent upon certain conditions and other regulatory approvals, as well as approval by the shareholders of Alignvest and Sagicor. If conditions are met, the transaction is expected to close during the first quarter or early in the second quarter of 2019,” Sagicor said.
Once regulatory approval is received, Sagicor will delist from the Barbados Stock Exchange, the Trinidad and Tobago Stock Exchange and the London Stock Exchange and be listed on the Toronto Stock Exchange (TSX).
If the deal goes through, a new entity named New Sagicor will be created, and Alignvest will continue from Ontario, Canada to Bermuda and become regulated under the Companies Act 1981 of Bermuda. Sagicor’s head office will remain in Barbados and no changes are expected to the operating companies, the insurance company stated.
Sagicor said it believes this transaction will unlock significant value for its shareholders.
“A potential listing on the TSX provides access to a liquid exchange market and the opportunity to access sophisticated institutional and large-scale investors, leading to better price discovery,” it said. “Alignvest is delivering significant value to Sagicor with its corporate development acumen and its recruitment of highly experienced directors to the board.”
Additionally, 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 Jamaica and Trinidad and Tobago.
Sagicor said it expects that this transaction will increase annual net income by approximately US$30 million, upon closing. Closing is expected 2020, subject to regulatory approval and certain conditions being met.
“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 CEO of Sagicor Financial Corporation.