CBL Corp has completed its €94.5million ($NZ142.6 million) purchase of France’s Securities and Financial Solutions Europe SA (SFS), taking over its biggest customer in a deal the credit and financial risk insurer expects will lift earnings.
The Auckland-based company closed the deal in Luxembourg on Thursday, after receiving approval from Luxembourg’s Commissariat aux Assurances in October 2016.
SFS is France’s biggest specialist producer of construction sector insurance and, with the IMS claims management operation which CBL has also bought, generated normalised operating earnings of €8.2million on revenue of €41million in 2015.
In September, CBL completed the first tranche of a planned capital-raising in a "heavily oversubscribed" placement, selling $60million of new shares at $3.45, an 8.2% discount, reducing CBL’s pro forma debt to $102million from $162million. It also launched a share purchase plan at the same price, and declared a 3c dividend in October.
Reinsurance business originated from SFS accounted for about 41.4% of CBL’s gross written premiums in 2015, down from 49.9% in 2014. The NZX-listed insurer posted an annual profit of $35.5million in 2015, beating the forecast in its initial public offering prospectus for earnings of $26.1million.
CBL paid for the acquisition through cash, bank debt and vendor funding. SFS executive chairman and shareholder Antoine Guiguet will keep his position and retain 26% of the CBL subsidiary acquiring the companies, while IMS managing director Gerard Marichy will also keep his position and buy a 3% stake in the subsidiary. SFS’s principal owner Patrice Gilles will exit and become an ambassador of SFS.
CBL listed on the NZX in October 2015, raising $90million at $1.55 a share to help buy Australian insurer Assetinsure.
