Sagi­cor Fi­nan­cial Com­pa­ny, the largest Caribbean in­sur­ance com­pa­ny by as­sets, an­nounced yes­ter­day it had re­ceived all reg­u­la­to­ry ap­provals to com­plete its ac­qui­si­tion of ivari, the Cana­di­an in­sur­ance com­pa­ny.

Sagi­cor has de­scribed ivari as “the lead­ing mid­dle-mar­ket in­di­vid­ual life in­sur­er in Cana­da fo­cused on the uni­ver­sal and term life mar­kets.”

In a short state­ment yes­ter­day, Sagi­cor said the trans­ac­tion is ex­pect­ed to close on or about Oc­to­ber 3, 2023, sub­ject to the sat­is­fac­tion of all clos­ing con­di­tions.

When the ac­qui­si­tion was an­nounced in Au­gust 2022, Sagi­cor said the ex­pect­ed to­tal con­sid­er­a­tion for ivari would be C$365 mil­lion, in­clud­ing fees.

Sagi­cor said be­fore clos­ing, the Cana­di­an com­pa­ny was ex­pect­ed to in­ject ad­di­tion­al eq­ui­ty cap­i­tal in­to the busi­ness to meet IFRS 17 and LI­CAT 2023 stan­dards. The ad­di­tion­al eq­ui­ty would be re­flect­ed in pur­chase price, ac­cord­ing to the Caribbean in­sur­ance com­pa­ny.

At yes­ter­day’s ex­change rate, the ex­pect­ed pur­chase price for ivari would be about US$270 mil­lion.

Sagi­cor es­ti­mat­ed that the to­tal con­sid­er­a­tion for the ac­qui­si­tion would be fund­ed by ap­prox­i­mate­ly 80 per cent debt and 20 per cent cash.

In an Au­gust 2022 in­vestor pre­sen­ta­tion, Sagi­cor said ivari had as­sets of C$9.9 bil­lion as at the end of De­cem­ber 2021 and that 72 per cent of its gross pre­mi­ums came from its uni­ver­sal life busi­ness.

Head­quar­tered in Bar­ba­dos, Sagi­cor de­clared as­sets of US$10.4 bil­lion as at the end of De­cem­ber 2021.

Sagi­cor fore­cast that the ac­qui­si­tion of ivari would in­crease the to­tal as­sets of the com­bined com­pa­ny to US$21.3 bil­lion, 73 per cent of which would comes from the North Amer­i­can mar­kets. Sagi­cor es­ti­mat­ed that up­on ac­qui­si­tion, ivari would ac­count for 53 per cent of the com­bined com­pa­ny’s as­sets and Sagi­cor USA would ac­count for 20 per cent of its com­bined as­sets.

Sagi­cor al­so es­ti­mat­ed that the pur­chase of ivari would in­crease its net in­come to share­hold­ers to US$173 mil­lion, 53 per cent of which would come from the North Amer­i­can mar­ket.

In Au­gust 2022, Sagi­cor fore­cast that the ac­qui­si­tion of ivari would dou­ble its in­vest­ment port­fo­lio from US$8.6 bil­lion to US$16.4 bil­lion.

In mak­ing the in­vest­ment case for the ac­qui­si­tion, Sagi­cor said the pur­chase would give it ge­o­graph­ic di­ver­si­fi­ca­tion by adding “a pres­ence in a large, well es­tab­lished and grow­ing Cana­di­an life in­sur­ance mar­ket. The ac­qui­si­tion of ivari would pro­vide Sagi­cor with a “unique op­por­tu­ni­ty to en­ter the Cana­di­an mar­ket with an es­tab­lished plat­form and sig­nif­i­cant scale” and would re­sult in the di­ver­si­fi­ca­tion of the Caribbean com­pa­ny’s as­sets, rev­enue and net in­come.

In the in­vestor pre­sen­ta­tion last year, Sagi­cor said it held the num­ber 2 po­si­tion in the T&T mar­ket in or­di­nary life, group life and an­nu­ities, the num­ber 1 po­si­tion in Ja­maica in in­di­vid­ual life in­sur­ance, group life in­sur­ance, group health in­sur­ance and pen­sions. Sagi­cor al­so said it had the third largest bank in Ja­maica.

Sagi­cor was list­ed on the Toron­to Stock Ex­change in De­cem­ber 2019, af­ter be­ing delist­ed from the T&T, Bar­ba­dos and Lon­don stock ex­changes.