Outsurance to boost its stake in Australian insurer Youi
Short-term insurer Outsurance has struck a deal to boost its ownership of its Australian business Youi Holdings by up to an additional 5.3%.
The group advised shareholders on Friday that Outsurance Holdings, the subsidiary in which the group has an 89.7% stake, had entered into an agreement with a co-founder, Willem Roos, that will see it acquire half his shareholding, which represents 2.65% in Youi, for A$36m (R427.5m). Outsurance retains an option to acquire a further 2.65% in Youi by end-October 2023.
Though the deal became effective on March 30 it remains subject to various conditions being met including obtaining foreign exchange approval from the Reserve Bank.
The transaction has a longstop date of May 31 which means if it has not concluded by that date in the event that certain conditions are not met, Outsurance will still be able to buy the shares by October 31.
The full acquisition of the Roos interest will see Outsurance ultimately increase its stake in Youi from 89.8% to 95.1%.
Roos is one of the founders of Outsurance Holdings and served as its CEO until 2018. He was a member of the team that started Youi in 2008, acquiring his 5.3% interest through an employee share option scheme (ESOP) initiated at its inception in 2008.
Youi has enjoyed significant growth in recent years with the expansion of its product range and distribution partnership with Blue Zebra Insurance and is well positioned for future growth, which Outsurance said underpins its intention to boost its long-term stake in the business. The Australian-based insurer’s net asset value was deemed to be R5.27bn as at endDecember while its after tax profit for the second half of 2022 was R653m.