SUN Life Financial Inc., a Canada-based financial services company listed in multiple exchanges, said it is acquiring a US-based employee benefits firm for $975 million in a bid to expand its presence in the US and North America.
In a statement attached to its disclosure to the Philippine Stock Exchange (PSE), Sun Life said it is in the process of acquiring Assurant Inc., which is expected to close within the first quarter of next year, subject to closing terms and conditions as well as corporate regulatory approvals.
Aside from the PSE, Sun Life is also listed on the Toronto Stock Exchange and the New York Stock Exchange.
The acquisition of Assurant will secure Sun Life’s creation of the sixth largest employee benefits business in the US, having one of the broadest product portfolios due to the combined businesses of Sun Life and Assurant.
This is the company’s second acquisition this year in a bid to expand its US Group after it acquired North American property investment managing firm Bentall Kennedy Group for $560-million.
“The acquisition of the Assurant Employee Benefits business is directly on strategy, accelerating growth of our US Group Benefits business and expanding the scope of our benefits business in North America,” Dean Connor, president and chief executive officer of Sun Life, said in the statement.
“The transaction is another example of how we are deploying capital effectively across all four pillars of growth to create long-term value for shareholders of Sun Life Financial,” he added.
The buyout will boost the size and scale of the US Group Benefits business, pegged to grow by over 50 percent to about $4 billion after full realization. It will strengthen the company’s partnerships with brokers and private exchanges as well as supporting investments in technology and distribution.
The fusion of Assurant into Sun Life will add new components to Sun Life’s businesses which includes the Dental business, Group Life and Disability business, as well as Disability RMS business. This will also bring protection to 64,009 employees in small, medium and large workplaces.
Morgan Stanley & Co. LLC was appointed as financial advisor and Debevoise & Plimpton LLP is the legal advisor to Sun Life. The acquisition will be funded by combined cash and subordinated debt.
“This combination will enable us to offer one of the broadest arrays of employee benefits products in to market to our customers…Our increased size will also support future investments as we continue to grow our US business,” said Dan Fishbein MD, president of Sun Life US Group.
“This transaction will allow us to grow profitability and bring value to our customers, partners, distributors, employees and the communities we serve. It will be business as usual until the close of the transaction, and we will work closely with Assurant Employee Benefits to ensure
the smoothest possible transition for employees and seamless service for customers,” Fishbein added.