CNBC analyst: BrightRock acquisition “a good move by Sanlam”

On Wednesday, 25 January, BrightRock and Sanlam announced that Sanlam is set to acquire a 53% stake in needs-matched life insurance provider, BrightRock, subject to regulatory approval.

Don’t miss portfolio manager Gary van Onselin’s take on this entrepreneurial miletone on CNBC:

You can also read the full announcement by BrightRock and Sanlam here.

Netwerk24: Sanlam koop 53% van BrightRock

Sanlam het ’n meerderheidsbelang van 53% in die lewensversekeringsmaatskappy BrightRock gekoop vir ’n bedrag van tot R707 miljoen.

Die finansiëledienstegroep het Woensdagmiddag op die JSE se Sens-nuusdiens aangekondig die transaksie is nog aan regulatoriese goedkeuring onderhewig.

Hennie de Villiers, adjunkhoof van Sanlam Persoonlike Finansies, sê noulettendheidsprosesse is reeds afgehandel. Die transaksiebedrag sal afhang van presies wanneer dit finaal goedgekeur kan word, maar dit sal nie meer as R707 miljoen wees nie, mits die transaksie in die eerste helfte van die jaar beklink word.

Sanlam sal dit uit sy beskikbare kapitaalbronne finansier.

Volgens De Villiers is die verkryging deel van Sanlam se strategie om winsgewende en volhoubare groeigeleenthede te soek, en dit beklemtoon ook die groep se verbintenis om steeds in Suid-Afrika te belê.

Sanlam het die afgelope jaar of wat groot transaksies buite die land gedoen, soos die koop van die belang in Saham Finances wat in die res van Afrika sake doen, asook sy beleggings in die Indiese finansiëledienstebedryf. Sanlam het in Desember sy belang in Saham Finances van 30% tot 46,6% opgestoot.

Volgens De Villiers het BrightRock ’n sterk teenwoordigheid in die plaaslike mark opgebou. Die onderneming sal voortgaan as ’n onafhanklike onderneming met sy eie bestuurspan, handelsnaam en lewensversekeringslisensie.

Schalk Malan, hoof van BrightRock, sê sy onderneming het sterk gegroei sedert dit in 2011 begin is, en dit bied nou dekking van R148 miljard en kry jaarlikse premie-inkomste van meer as R611 miljoen. Die Lombard Insurance Group wat die aanvangsbeleggers in BrightRock was, bly aan as aandeelhouers, maar Malan is nie in ‘n posisie om te sê wat Lombard se belang in die onderneming voor en na die transaksie is en sal wees nie.

BrightRock se produkte is tot dusver slegs deur onafhanklike makelaars verkoop, maar sal voortaan ook via Sanlam se finansiële adviseurs en makelaars beskikbaar wees.

Sanlam se aandeelprys was Woensdagaand 0,43% hoër op R66,03. - Francois Williams

Hierdie berig is oorspronklik op Netwerk24 en in Die Burger gepubliseer. Lees die oorspronklike berig hier.

Business Day: Sanlam in control of BrightRock

Sanlam has clinched the first major deal on home soil in a while, agreeing to acquire a majority stake in smaller insurer BrightRock for up to R707m.

Sanlam’s life insurance subsidiary will purchase 53% of the needs-matched insurer, valuing BrightRock at about R1.3bn. BrightRock offers products structured to adapt as each client’s needs change throughout life.

Hennie de Villiers, deputy CEO of Sanlam Personal Finance — the insurer’s South African retail cluster — said the deal was testimony to Sanlam’s commitment to invest in SA.

“Sanlam’s acquisition of a majority share in the company is in line with our strategy to seek profitable and sustainable growth opportunities,” he said.

The deal is still subject to regulatory approvals.

Sanlam concluded its last domestic deal of this size in December 2015, when it bought a 28.7% interest in healthcare administrator Afrocentric Healthcare Assets for R703m.

The purchase price for just more than half of BrightRock, which brings in R611m in annual premium income, has not raised eyebrows. “As the maximum purchase price of R707m only represents 0.5% of Sanlam’s market capitalisation, it won’t initially impact Sanlam’s results very meaningfully,” said Adrian Cloete, an analyst at PSG Wealth. “The transaction is also a profitable and sustainable growth opportunity that should give a much superior return than the investment return that the R707m is currently earning.”

This news report was published on Thursday, 26 January 2017. Read the original news report here.

Breaking news: BrightRock is poised for future growth

We are proud and delighted to share breaking news that’s set to position us for exponential future growth.

Today (25 January 2017), BrightRock and Sanlam have announced that Sanlam, subject to regulatory approval, will acquire a 53% stake in BrightRock for R707 million.

This is a milestone in BrightRock’s entrepreneurial journey and an important step towards realising our vision of building a fully-fledged, competitive life business.

After five years in business, this announcement cements – and reinforces – BrightRock’s reputation as one of the fastest-growing life insurance players in our sector. Importantly, Sanlam and BrightRock will continue to function as separate businesses, each of them retaining their own brand, life insurance licence and management team.

Read the full press release here.