TIDMSFI
RNS Number : 6262I
Sagicor Financial Corporation Ltd
27 November 2018
Press Release
FOR IMMEDIATE RELEASE
Barbados, 27 November, 2018
(in USD, except as otherwise noted)
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES or DISSEMINATION
IN THE UNITED STATES
Sagicor Financial Corporation Limited Enters into Arrangement
Agreement with Alignvest Acquisition II Corporation and Agreement
for Strategic Acquisition
-- 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 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
-- Mr. Dodridge Miller, President and CEO since 2002, and his
long-tenured executive team with extensive insurance and
local-market expertise will continue to lead the organization.
Sagicor's current management team is rolling 100% of their
equity interest into the transaction
-- The appointed board is expected to consist of existing Sagicor
board directors and include several Alignvest-appointed directors
that bring deep global insurance and financial services experiences.
Upon closing, Mr. Timothy Hodgson, Managing Partner of Alignvest
Management Corporation, will become the Chairman of the Board
-- Cash will be used to support the cash option to shareholders
and to fund growth
-- Shareholder approval is expected in Q1 2019 and completion
of this transaction is expected in late Q1 or Q2 2019, subject
to certain conditions and regulatory approvals
-- Sagicor and Alignvest will acquire Scotiabank's life insurance
operations in Jamaica and in Trinidad & Tobago and will also
enter into a 20-year exclusive agreement where Scotiabank
will provide insurance solutions to Scotiabank's clients
in Jamaica and Trinidad & Tobago. 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
Sagicor Financial Corporation Limited ("Sagicor"), which is
listed on the Barbados, Trinidad & Tobago and London Stock
Exchanges, announced today that it has entered into a definitive
arrangement agreement ("Arrangement Agreement") with Alignvest
Acquisition II Corporation ("Alignvest", TSX:AQY.A, AQY.WT)
pursuant to which Alignvest will acquire all the shares of Sagicor
by way of a scheme of arrangement under the laws of Bermuda, where
Sagicor is incorporated, at a price of US$1.75 per share (such
resulting entity, "New Sagicor") with an aggregate value of
approximately US $536 million. The completion of this arrangement
is dependent upon certain conditions and other regulatory
approvals, as well as shareholder 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 believes that the transaction will unlock significant
value for its shareholders in several ways:
-- 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
-- Cash not used to purchase Sagicor shares will be used to help
accelerate organic growth and pursue industry consolidation
-- Alignvest is delivering significant value to Sagicor with its
corporate development acumen and its recruitment of highly
experienced directors to the board
"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.
"We are extremely excited to be forming this partnership between
Sagicor and Alignvest," said Timothy Hodgson, Managing Partner of
Alignvest Management Corporation. "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."
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. We also provide life insurance
and annuity products in the United States, as well as banking
services in certain Caribbean countries. Our wide range products
and services include individual and group life and health
insurance, annuities and pension administration services, property
and casualty insurance, asset management, commercial and retail
banking, investment management and other financial services. Over
the years, we have grown our net income from approximately US$2
million in 1990 to US$62 million for the 12 months ended December
31, 2017. Sagicor's common shares are currently publicly listed on
the Barbados Stock Exchange, the Trinidad and Tobago Stock Exchange
and the London Stock Exchange. We expect to delist the shares on
the other exchanges as part of this transaction, upon listing on
the Toronto Stock Exchange.
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. AMC's partners have a strong combination of investment and
operational expertise, having created and managed numerous
operating businesses and having built and led large highly
profitable businesses within global financial and consulting firms.
Upon closing, Andre Mousseau, current Chief Operating Officer of
Alignvest, will join Sagicor as Group Chief Financial Officer.
Summary of Transaction
Alignvest and Sagicor have entered into an Arrangement Agreement
pursuant to which, among other things, Alignvest has agreed to
acquire all the shares of Sagicor by way of a scheme of arrangement
under Bermuda law involving the transfer of all of the shares of
Sagicor to Alignvest in exchange for:
-- in the case of Sagicor shareholders who were also Sagicor
shareholders as at December 6(th) , 2018 (the
"Election Record Date"):
o the option of either US$1.75 per Sagicor share (the "Cash
Consideration") or Alignvest common shares in an amount based on an
exchange ratio which the parties have agreed has a value of US$1.75
per Sagicor share (the "Share Consideration"); or
o a combination of the Cash Consideration and the Share
Consideration; or
-- for all other holders, the Share Consideration.
Any Cash Consideration is only available in respect of up to
10,000 Sagicor shares held by each Sagicor shareholder as at the
Election Record Date which continue to be held as at the time of
closing of the transactions contemplated in the Arrangement
Agreement (the "Closing"). All other consideration paid to Sagicor
shareholders at the Closing will be Share Consideration.
An explanatory statement will be sent to Sagicor shareholders
shortly. Shareholders will be notified of the date for a meeting of
shareholders to be convened at the direction of the Supreme Court
of Bermuda.
Further details are set out in the Arrangement Agreement, as
well as an investor presentation, which will be available on
Sagicor's website and under Alignvest's profile on SEDAR. Alignvest
will also file with the Canadian securities regulatory authorities
in each of the provinces and territories of Canada (other than
Quebec), a non- offering prospectus containing disclosure regarding
Sagicor and the arrangement. In connection with the transaction,
Alignvest will continue from Ontario, Canada to Bermuda and will be
registered under the Companies Act 1981 of Bermuda. The head office
will remain in Barbados and no changes are expected to the
operating companies.
The transaction is subject to Sagicor shareholder approval,
Alignvest shareholder approval and the satisfaction of certain
conditions, including the sanction of the scheme of arrangement by
the Supreme Court of Bermuda and other regulatory approvals.
The Boards of Directors of each of Alignvest and Sagicor have
approved the transaction and determined that it is fair to their
respective shareholders and in the companies' respective best
interests. Closing is expected to occur during the first quarter or
early in the second quarter of 2019. Upon closing of the
transaction, it is expected that Alignvest will change its name to
"Sagicor Financial Company Ltd." and become a Bermuda company. The
new entity will be a reporting issuer in all provinces and
territories of Canada other than Quebec, as well as in certain
Caribbean jurisdictions.
Additional details of the transaction are available in
Alignvest's press release dated November 27, 2018, which may be
found on their website at www.alignvest.com.
Proposed Board of Directors
Upon closing, the appointed board is expected to consist of
existing Sagicor board directors and include several
Alignvest-appointed directors. Sagicor's Board of Directors is
expected to include:
-- Dodridge D. Miller - President and Group CEO of Sagicor since 2002
-- Tim Hodgson - Chairman - Managing Partner of Alignvest
Management Corporation, former CEO of Goldman Sachs Canada, and
Special Advisor to Governor Mark Carney at the Bank of Canada
-- Sir Hilary Beckles - Vice Chancellor of the University of the West Indies
-- Alister Campbell - Former CEO of the Guarantee and Zurich Insurance Canada
-- Peter Clarke - Chairman of Guardian Media Ltd. Former
Chairman at Trinidad & Tobago Stock Exchange
-- Monish Dutt - Former Chief Credit Officer for Global
Financial Institutions & Private Equity Funds at IFC
-- Stephen Facey - Chairman and CEO of PanJam Investment Limited
-- Mahmood Khimji - Co-founder and President of Highgate Hotels, L.P.
-- Stephen McNamara - Senior Partner of McNamara & Company, Attorney-at-Law of St. Lucia
-- Rik Parkhill - Former CEO of CIBC First Caribbean
-- Reza Satchu -Co-Founder and Managing Partner of Alignvest Management Corporation
Summary of Strategic Acquisition
Sagicor regularly engages in discussions with respect to
possible acquisitions and investments in new assets and businesses,
related financings and refinancings. Concurrent with the
announcement of this transaction, Sagicor has also announced that
Sagicor and Alignvest have entered into an agreement whereby
Sagicor's insurance subsidiaries will acquire ScotiaLife Jamaica
and ScotiaLife Trinidad & Tobago and New Sagicor will enter
into a 20- year strategic agreement with Scotiabank in those
regions. Primary products in the ScotiaLife portfolio include
creditor insurance and non-creditor insurance policies such as
whole life, universal life and annuity products. Through the
agreement, Scotiabank customers will be able to access New
Sagicor's full suite of insurance products, including life, health,
savings, auto and home insurance, underwritten by Sagicor.
Sagicor expects that this acquisition will contribute run-rate
net income of approximately US$30 million following the closing,
which is expected to occur in 2020.
Advisors
Sagicor has been advised on legal matters by Paul Hastings LLP
and Blake, Cassels & Graydon LLP. Alignvest has been advised by
Stikeman Elliott LLP and Dorsey & Whitney LLP.
Certain Bermudian legal matters were advised by Conyers Dill
& Pearman Limited on behalf of Sagicor and
Appleby, on Alignvest's behalf.
J.P. Morgan Securities LLC has acted as the exclusive financial
advisor to Sagicor in connection with this transaction.
RBC Capital Markets acted as exclusive financial advisor to
Alignvest.
About Sagicor Financial Corporation Limited
Sagicor, a 178-year old entity, is the leading financial
services provider in the Caribbean, and operates in 22 countries
including the USA and Latin America. With total assets of US $6.8
billion, and US $1.3 billion in total capital as at December 31,
2017, Sagicor offers a wide range of products and services,
including life, health, and general insurance, banking, pensions,
annuities and real estate.
Additional information about Sagicor can be obtained by visiting
www.sagicor.com
About Alignvest Acquisition II Corporation
Alignvest Acquisition II Corporation is a special purpose
acquisition corporation incorporated under the laws of the Province
of Ontario for the purposes of effecting a qualifying acquisition.
The Corporation's registered office is located at 100 King Street
West, 70(th) Floor, Suite 7050, Toronto, Ontario M5X 1C7.
Cautionary Statement
This press release contains "forward-looking information" within
the meaning of applicable securities laws. Forward-looking
information may relate to our future outlook and anticipated events
or results and may include information regarding our financial
position, business strategy, growth strategies, budgets,
operations, financial results, taxes, dividend policy, plans and
objectives, anticipated financial impacts of the proposed
acquisition, and the satisfaction of the closing conditions to and
the timing of the completion of the proposed acquisitions.
Particularly, information regarding our expectations of future
results, performance, achievements, prospects or opportunities or
the markets in which we operate is forward-looking information. In
some cases, forward-looking information can be identified by the
use of forward-looking terminology such as "plans", "targets",
"expects" or "does not expect", "an opportunity exists", "outlook",
"prospects", "strategy", "intends", "believes", or variations of
such words and phrases or state that certain actions, events or
results "may", "could", "would", "might", "will", "will be taken",
"occur" or "be achieved". In addition, any statements that refer to
expectations, intentions, projections or other characterizations of
future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not
historical facts but instead represent management's expectations,
estimates and projections regarding future events or circumstances.
Forward-looking information contained in this press release is
based on our opinions, estimates and assumptions in light of our
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors that we
currently believe are appropriate and reasonable in the
circumstances. Despite a careful process to prepare and review the
forward-looking information, there can be no assurance that the
underlying opinions, estimates and assumptions will prove to be
correct. Actual results may differ from these expectations,
estimates and projections and consequently, you should not rely on
these forward-looking statements as predictions of future
events.
This news release includes forward-looking information and
statements pertaining to, among other things, the transactions, the
receipt of necessary approvals for the transactions, the
anticipating timing for closings and for mailing of the proxy
circulars, holding of the shareholder meetings, and completion of
the transactions contemplated in the Arrangement Agreement, certain
anticipated strategic, operational and competitive advantages and
benefits created by the transaction, and future opportunities for
the business.
These forward-looking statements reflect material factors and
expectations and assumptions of Alignvest and Sagicor including,
without limitation, expectations and assumptions relating to
Alignvest and Sagicor being able
to receive all required regulatory and shareholder approvals and
current estimates and assumptions regarding the transactions and
their benefits, which are based on Alignvest's and Sagicor's
perception of historical trends, current conditions and
expectations, as well as other factors believed to be appropriate
in the circumstances. Alignvest's and Sagicor's estimates, beliefs
and assumptions are inherently subject to uncertainties and
contingencies regarding future events and as such, are subject to
change.
The analyses and statements regarding the announced acquisition
of ScotiaLife Trinidad & Tobago ("SLTT") and Scotia Jamaica
Life Insurance Company ("SJLIC") by Sagicor contained in the press
release rely on the following assumptions:
-- That the conditions precedents to closing contemplated by the agreement for the SLTT and SJLIC acquisition are
satisfied in the timeframe anticipated
-- That assumed forward net earnings anticipated from this acquisition are realized (see the Investor Presentation
for a detailed explanation of forward earnings assumptions)
Alignvest and Sagicor have also assumed that business and
economic conditions affecting the businesses will continue
substantially in the ordinary course, including, without
limitation, with respect to general industry conditions, foreign
exchange rates, interest rates, competition, regulations, reserve
requirements, taxes, that there will be no catastrophic events or
pandemics that are not adequately covered by reinsurance, and that
there will be no material changes in customer or employee
relations.
Net income targets and the related assumptions, involve known
and unknown risks and uncertainties that may cause actual results
to differ materially. Alignvest and Sagicor approved these targets
on November 26, 2018 and, while they believe that there is a
reasonable basis for these targets, such targets may not be
met.
Numerous risks and uncertainties could cause the actual events
and results to differ materially from the estimates, beliefs and
assumptions expressed or implied in the forward-looking statements,
including, but not limited to: the conditions to the consummation
of the transaction may not be satisfied or waived; risks relating
to the failure to obtain necessary shareholder, court, and
regulatory approvals for the transaction; the filing and/or mailing
of documentation relating to the transaction may not be completed
on a timely basis; high levels of redemptions by Alignvest
shareholders; the anticipated strategic, operational and
competitive benefits may not be realized; the transaction may be
modified, restructured or terminated; events or series of events
may cause business interruptions; and the availability of equity
and debt financing and/or refinancing on acceptable terms.
An investment in our securities is subject to a number of risks
that should be considered by a prospective purchaser. Prospective
purchasers should carefully consider the risk factors set out in
the Investor Presentation. All of the forward-looking information
contained in this press release is expressly qualified by the
foregoing cautionary statements. Investors should read the Investor
Presentation which is available on our website and consult their
own professional advisors to ascertain and assess the income tax,
legal, risk factors and other aspects of their investment.
For further information please contact:
Sagicor Financial Corporation Limited
Ingrid Card
Vice President - Group Marketing, Communications & Brand
Experience 246-230-5315 or Ingrid_Card@sagicor.com
Samantha Cheung
Executive Vice President - Investor Relations
416-898-4324 or 1-800-342-0719 or
Samantha_Cheung@sagicor.com
Alignvest Acquisition II Corporation
Andre Mousseau
Chief Operating Officer, Alignvest Acquisition II Corporation
416-775-1916 or amousseau@alignvest.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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