News and Press
| Date: | 11 MAY 2010 |
| Title: | Fenchurch advises Standard Life on the sale of Standard Life Healthcare to Discovery/ PruHealth |
| Author: | - |
| Download: | pdf version |
For Immediate Release
Fenchurch advises Standard Life on the sale of Standard Life
Healthcare to Discovery/ PruHealth
Fenchurch advises Standard Life on the sale of Standard Life Healthcare to Discovery/ PruHealth
Fenchurch Advisory Partners is pleased to announce that it is acting as exclusive financial adviser to Standard Life plc on the sale of Standard Life Healthcare Limited to a subsidiary of Discovery Holdings Limited* for £138 million payable in cash at completion.
The transaction is subject to approval by the Financial Services Authority and the South African Reserve Bank and is expected to complete by 31st July 2010.
Standard Life’s strategic focus is on the long-term savings and investments market and as a result the manufacturing of private medical insurance (“PMI”) is not core to its UK strategy. The net cash proceeds from the sale will be used for general corporate purposes including the acceleration of Standard Life’s key initiatives to grow its business. At completion approximately 562 employees will transfer as part of the transaction.
Standard Life Healthcare is the fourth largest provider of PMI in the United Kingdom with a market share of approximately 8 per cent, offering a full range of products to individuals, SMEs and large corporate clients. In 2009, Standard Life Healthcare generated IFRS profit before tax of £9.4 million (2008: £7.1 million) and profit after tax of £7.1 million (2008: £5.0 million). Standard Life Healthcare had total assets of £258.5 million and net assets of £97.1 million as at 31st December 2009.
Chief Executive of Standard Life, David Nish, commented: “Standard Life Healthcare is a leading and successful business in the UK PMI market, but in the context of sharpening our strategic focus on the long-term savings and investments market we concluded it is not core. Discovery is a highly respected global health insurer with an established presence in the UK. The sale provides an excellent outcome for Standard Life Healthcare’s customers, commercial partners and employees as well as for Standard Life’s shareholders.”
Discovery, listed on the Johannesburg stock exchange with a market capitalisation of ZAR 20.9 billion (£1.9 billion**), is a leading financial services institution operating in insurance, long-term savings and well-being in South Africa, the United Kingdom, the United States and China. In the UK Discovery operates via a joint-venture with Prudential plc, that comprises PruHealth, a specialist private medical insurance provider, and PruProtect, a provider of pure risk protection products.
Following completion and a transitional period the intention is to re-brand Standard Life Healthcare under the PruHealth brand.
Chief Executive of Discovery, Adrian Gore, said: "We are excited by the opportunity to acquire a business of Standard Life Healthcare's quality. Standard Life Healthcare's focus on delivering the highest quality of products and service is consistent with our own approach. The assets of Standard Life Healthcare and PruHealth are highly complementary and we believe that the combined business will be well-positioned for future growth as a leader in the PMI market."
* As at the date of announcement, the acquiring entity is Discovery Offshore Holdings 2 Limited, a subsidiary of Discovery. However, under the terms of the transaction, Discovery has the right to nominate PruHealth or another Discovery group company to be the purchaser prior to completion
** ZAR/ GBP exchange rate of 11.13 as at 10 May 2010
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