Hol­lard fi­nally ac­quires Re­gent

Trans­ac­tion now com­pleted

The Star Early Edition - - COMPANIES - Sandile Mchunu

THE HOL­LARD In­sur­ance Group yes­ter­day an­nounced that it had fi­nally ac­quired Re­gent In­sur­ance Group for R1.8 bil­lion from JSE-listed com­pany Im­pe­rial Hold­ings.

Hol­lard said it had been work­ing on the deal with Im­pe­rial since Septem­ber 2015.

The com­pany said the trans­ac­tion was for­mally com­pleted af­ter the Fi­nan­cial Ser­vices Board (FSB) and the Com­pe­ti­tion Tri­bunal gave it their bless­ing in April.

In Jan­uary, Hol­lard ac­quired Re­gent’s non-South African in­ter­ests in Botswana, Zam­bia and Le­sotho for an up­front con­sid­er­a­tion of R697 mil­lion.

Hol­lard chief ex­ec­u­tive Nico Kohler said the trans­ac­tion rep­re­sented an im­por­tant mile­stone for the com­pany, given its ob­jec­tives to in­crease its build­ing scale in the coun­try and foot­print on the con­ti­nent.

“The deal ex­pands our life dis­tri­bu­tion ca­pa­bil­ity and sig­nif­i­cantly en­hances our pres­ence and ca­pa­bil­ity in the com­mer­cial ve­hi­cle space,” said Kohler, charg­ing that the in­te­gra­tion would strengthen Hol­lard’s po­si­tion as South Africa’s largest in­de­pen­dent in­sur­ance group, and re­sult in a con­sol­i­dated oper­a­tion that em­ploys more than 3 600 peo­ple and gen­er­ates more than R20bn per year in pre­mium in­come.

He added that the ac­qui­si­tion of Re­gent’s non-South African in­ter­ests had al­ready sup­ported Hol­lard’s in­ter­na­tional growth, which now con­trib­utes more than 25 per­cent of the group’s prof­its and is en­joy­ing growth of al­most 30 per­cent per an­num. In­dus­try ex­perts said the deal made sense for both com­pa­nies.

Peter Takaen­desa, port­fo­lio man­ager at Mer­gence In­vest­ment Man­agers, said the dis­posal of the Re­gent Group was in line with Im­pe­rial’s strat­egy to fo­cus on ve­hi­cle dis­tri­bu­tion and lo­gis­tics.

Takaen­desa said Hol­lard also needed the Re­gent busi­ness to re­duce its rel­a­tively high gear­ing lev­els.

“The Re­gent Group has been a very prof­itable busi­ness for Im­pe­rial, but the fi­nal net exit price of R1.8bn is lower than the R2.3bn they had an­nounced in Septem­ber 2015.

“Re­gent is likely to ben­e­fit more from be­ing part of Hol­lard, which spe­cialises in in­sur­ance and fi­nan­cial ser­vices. The only chal­lenge for Im­pe­rial will now be to find an­other as­set that gives them re­turns that are as good as they have been re­ceiv­ing from Re­gent.”

Elec­tus Fund Man­agers eq­uity an­a­lyst Da­mon Buss said the sale rep­re­sented Im­pe­rial chief ex­ec­u­tive Mark Lam­berti’s de­ci­sion to split the com­pany into two fo­cussed ar­eas of lo­gis­tics and Mo­tus (au­to­mo­tive busi­nesses).

Buss said Lam­berti had con­sis­tently pur­sues the strat­egy since he took over.

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