Wilton Re Ltd has agreed to purchase the majority of Dutch insurer Aegon N.V.‘s operations in Canada for $600 million. The assets to be acquired consist of Toronto-based life insurance provider Transamerica Life Canada and a number of affiliated businesses active in the Canadian market. The deal, which is expected to be closed in the first quarter of 2015, is being supported by equity funding from Canada Pension Plan Investment Board (CPPIB), which acquired the Bermuda-based Wilton Re for US$1.8 billion earlier in 2014. The company said the Transamerica Canada acquisition aligns with its strategy to provide risk and capital solutions to clients throughout North America.
Wilton Re Announces the Agreement to Acquire Transamerica Businesses in Canada from Aegon N.V.
October 16, 2014
(Wilton, Connecticut) Today, the board of directors of Wilton Re Ltd (“Wilton Re”) announced the execution of definitive agreements to acquire the majority of the Aegon N.V. operations in Canada for C$600 million, consisting of Transamerica Life Canada, Canadian Premier Life, Legacy General Insurance Company, Aegon Capital Management, Aegon Fund Management, CRI Canada and Selient, Inc. (“Transamerica Canada Business”). Wilton Re will fund the transaction with additional equity capital provided by its parent, Canada Pension Plan Investment Board.
Chris Stroup, Chairman and CEO of Wilton Re, said, “We are delighted to work on this important transaction with Aegon. Wilton Re views the acquisition of the Transamerica Canada businesses as well-aligned with our strategy to provide risk and capital solutions to clients throughout North America. Wilton Re is committed to the middle market, and Transamerica Canada is well positioned to serve the middle market in Canada. We intend to support the profitable growth of this business.”
“We are excited about the future of our business and look forward to working with Wilton Re to provide solutions for the long term financial protection of middle market families in the Canadian life insurance marketplace,” said Transamerica Canada President and CEO, Doug Brooks.
The acquired insurance business includes a C$10.6 billion portfolio of high quality assets as of September 30, 2014, and is comprised of individual life, annuity and segregated funds policies as well as credit insurance products. In addition, Wilton Re will acquire Aegon Capital Management, an investment manager, and Aegon Fund Management, a mutual fund company. No significant changes to business operations are expected.
The consummation of the transaction is subject to customary closing conditions and certain regulatory approvals, and is expected to occur in the first quarter of 2015.
UBS, Torys LLP, Deloitte, Milliman and AlixPartners acted as advisors to Wilton Re on the acquisition.
About Wilton Re
Wilton Re specializes in the acquisition and management of mortality and investment risk as well as with assisting life insurance clients with product development, underwriting, and new business strategies for the middle market. Wilton Re focuses on the North American life insurance market where the company provides risk capital and related services including M&A, reinsurance and longevity risk management. Wilton Re also partners with companies to implement new business strategies for middle market sales, with an emphasis on worksite, senior market and simplified term products. The Company offers fully customized solutions that include private labeling with supporting delivery and administrative systems. As of September 30, 2014, Wilton Re had US$14.5 billion of total assets, US$1.4 billion of annual operating revenues and US$1.5 billion of US GAAP equity.
About Transamerica Canada’s Insurance Business
Transamerica Life Canada (“TLC”) is one of Canada’s leading individual life insurance providers. Through a national network of independent distributors and advisors, TLC helps Canadians protect their families and plan for their financial futures. The Company has a significant block of in force traditional and interest-sensitive life insurance policies, deferred and single premium immediate annuities, as well as a closed block of segregated funds policies. In 2013, TLC had more than C$680 million in gross life premium revenue and at the end of the year the Company had more than 538,000 policies in‐force with more than C$173 billion of insurance coverage.
In its affinity business, Transamerica Canada also provides group coverage for credit cards and to credit union members through its other two insurance companies: Canadian Premier Life and Legacy General Insurance Company. Related companies include CRI Canada, an insurance agency, as well as Selient, Inc., a technology company offering loan origination software to credit unions. Total gross premium revenue in Transamerica’s affinity business in 2013 was C$284 million.
For more information, please visit www.transamerica.ca
Photo courtesy of Shutterstock