Sun Life to buy U.S. benefits firm DentaQuest for $2.5 bln in biggest deal since 2001
The Solar Life Monetary brand is seen at their company headquarters of One York Avenue in Toronto, Ontario, Canada, February 11, 2019. REUTERS/Chris Helgren//File Photograph
TORONTO, Oct 4 (Reuters) – Solar Life Monetary stated it would purchase U.S. dental advantages supplier DentaQuest for $2.48 billion in its greatest deal in 20 years, changing into the most recent cashed-up Canadian insurance coverage firm pursuing progress exterior its residence market.
The deal to accumulate the USA’ second-largest dental advantages supplier, with greater than 33 million members, will add about $100 million to its U.S. underlying earnings in its first full-year after closing, executives at Canada’s second-largest life insurer stated on an analyst name on Monday.
Solar Life introduced the deal late on Sunday.
It’s the greatest acquisition since Solar Life purchased Clarica Life Insurance coverage, from the place Chief Government Kevin Pressure joined the corporate, for C$7.3 billion ($5.8 billion) in 2002, in response to a spokeswoman.
Solar Life shares rose 1.7% to C$66.20 in morning buying and selling in Toronto, in contrast with a 0.4% decline within the inventory benchmark .
After synergies, anticipated to be $60 million, the agency is predicted so as to add 24 Canadian cents to underlying earnings per share and 50 foundation factors to its return on fairness, Canaccord Genuity analyst Scott Chan stated, including the transaction is “anticipated to help Solar Life’s peer-leading ROE metrics.”
The deal follows a slew of different acquisitions in recent times by Canadian life insurers, who, going through restricted progress at residence and holding document ranges of capital, pursue offers abroad, notably in the USA not too long ago.
Nice-West Lifeco was the most recent, agreeing in July to pay C$4.45 billion to purchase Prudential Monetary Inc’s full-service retirement enterprise.
Solar Life itself has been increasing within the U.S. group advantages enterprise, albeit with smaller offers, together with that of U.S. medical intelligence and health-care navigation supplier PinnacleCare and advantages platform .
It had beforehand flagged an urge for food to develop its group advantages and stop-loss enterprise, which protects towards unpredictable losses.
The deal provides Solar Life the “flexibility to maneuver” in future and make further investments, notably because it seeks to increase its pharmacy stop-loss enterprise in addition to to reap the benefits of potential expansions of well being care companies and funding within the U.S., executives stated on the decision.
Solar Life will incur transaction and integration prices of $250 million, the executives stated.
($1 = 1.2562 Canadian {dollars})
Reporting By Nichola Saminather; Modifying by Chizu Nomiyama and Emelia Sithole-Matarise
:
