27th May 2016 06:30
LONDON (Alliance News) - Closed-life fund consolidator Phoenix Group Holdings PLC on Friday said it has agreed a GBP375.0 million deal to acquire the pensions and protection business of AXA Wealth, the wealth management arm of French insurer AXA SA.
Phoenix will pay the consideration in cash, and the deal will add around GBP12.3 billion in assets under management to its books, along with more than 910,000 policies. The businesses acquired trade under the Embassy and SunLife brands.
The FTSE 250-listed group said the acquisition is expected to generate cashflows of around GBP300.0 million between 2016 and 2020 and GBP200.0 million from 2021 onwards.
The deal will be funded by a share placing, through which Phoenix will seek to raise around GBP190.0 million, along with a new debt facility with a consortium of banks. Phoenix expects to repay the short-term debt facility within six months of completing the deal, which it anticipates will occur in 2016.
"The acquisition of the Embassy and SunLife businesses represents another important step forward in Phoenix's growth strategy. The transaction meets our acquisition criteria and will generate additional cash for the group which supports the proposed increase in Phoenix's dividend," said Clive Bannister, Phoenix's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
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