PSG buys AIFA for undisclosed amount

JSE-LISTED independent financial services provider PSG Konsult has concluded an agreement to acquire Absa Insurance and Financial Advisers (AIFA), a commercial and industrial insurance brokerage business.

The amount of money was not disclosed because the acquisition falls below the threshold of the categorisation of transactions that require disclosure in terms of the JSE’s listings requirements.

The acquisition is subject to regulatory approvals.

AIFA has 102 advisers and more than 32 000 clients. Dan Hugo, the chief executive of distribution at PSG, said yesterday the acquisition would be funded from existing cash resources.

He said it would enhance PSG Insure’s footprint across South Africa, including some areas where they were not represented. The acquisition would be housed under PSG Insure. The other two divisions in the group are PSG Wealth and PSG Asset Management.

PSG Insure offers shortterm insurance solutions for individuals and businesses. The group said they partner with leading insurance providers to deliver a wide range of insurance options.

“PSG Konsult’s core focus remains organic growth but it will consider selective acquisitions that we can seamlessly integrate from a business and culture-fit perspective,” Hugo said.

PSG Konsult will release its interim results on October 5.

Nolwandle Mthombeni, an investment analyst at Mergence Investment Managers, said the acquisition was quite material for PSG Konsult because it would increase its client base and assets under management.

In the year to the end of February, PSG Insure achieved a 70 percent increase in recurring headline earnings. The group delivered a solid 16 percent rate of growth in recurring headline earnings per share and a return on equity of 25 percent.

The group said it was pleased with PSG Insure’s results, given that the division was still in an early growth phase.

It also achieved revenue growth of 19 percent compared with the prior year.

PSG Asset Management reported a 57 percent increase in recurring headline earnings, while PSG Wealth’s recurring headline earnings grew 1 percent.

The group reported that total assets under management increased to R175.3 billion, comprising managed assets of PSG Wealth and PSG Asset Management of R142.2bn and R33.1bn respectively. The group said this was against the backdrop of poor investment market returns.