Sagicor Financial Corporation Limited (Sagicor), has announced that it has entered into a takeover agreement with Alignvest Acquisition II Corporation, in which Alignvest will acquire Sagicor's shares at a price of approximately US$536 million.
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 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.
Once regulatory approval is received, Sagicor will be listed on the Toronto Stock Exchange (TSX); consequently Sagicor will delist from the Barbados Stock Exchange, the Trinidad and Tobago Stock Exchange and the London Stock Exchange.
Sagicor says 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 shareholders as at December 6th, 2018 shall have:
* 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
* 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.
Sagicor says it 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 will be used to support the cash option to shareholders and to fund growth
* Alignvest is delivering significant value to Sagicor with its corporate development acumen and its recruitment of highly experienced directors to the board
Furthermore, Sagicor says both 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 Sagicor will provide insurance solutions to Scotiabank’s clients in Jamaica and Trinidad & Tobago.
Sagicor says 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.