Alexforbes is acquiring a majority interest in TSA Administration (TSA), an independent provider of institutional group risk insurance administration services in South Africa with a 25-year track record, for an undisclosed sum.
Alexforbes chief executive Dawie de Villiers said in a statement on Friday the deal would bolster the group’s existing binder business, strengthen the offering to clients and broaden their relationship with intermediaries. The good relationships TSA had built with intermediaries would be maintained, he said.
Alexforbes would initially acquire 60% of TSA, with the option to acquire the remaining 40% over five years. The purchase price would be settled in cash and Alexforbes intended to fund it by drawing down on its existing term loan facility.
“The business has carved a significant leadership position in this space by providing a hassle-free experience to intermediaries through the combination of TSA service specialists and procuring group insurance from a panel of market-leading insurers. The business serves over 120 000 insured members across more than 2 000 institutional clients.” said De Villiers.
For comparison, Alexforbes’s website shows it has more than 5 000 institutional clients, 1.2 million client members and some 140 000 retail clients.
De Villiers said there was natural alignment between the two companies, as, for example, they shared an independence from product providers, and the appetite to partner with intermediaries.
“Both TSA and the Alexforbes binder business (AF Insured Solutions) will be enhanced due to our combined scale in the administration operations, as well as expanded market reach,” he said.
TSA will operate as an independently managed unit within the Alexforbes group to preserve business continuity, maintain relationships with intermediaries, and sustain the TSA team culture. AF Insured Solutions would be integrated within TSA.
“We are excited about the growth and development this partnership will bring to TSA and its clients,“ said TSA MD Greg Smith.
Alexforbes share price dropped 5.27% to R5.21 during early morning trade on Friday. It closed the day 7.09% lower at R5.11.
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