JMMB to acquire US$200m in Sagicor shares

JAMAICAN brokerage company JMMB has brokered a deal with Canadian investment company Alignvest, to purchase shares in insurance company Sagicor.

Alignvest made an announcement on Thursday, saying they have been in discussions with JMMB Group Ltd, and JMMB will purchase class B shares in Sagicor amounting to between US$200 million to US$250 million. Each share is expected to be purchased for CA$10. The deal is conditional on the completion of the transaction and approval from the Toronto Stock Exchange.

Alignvest has been raising capital as it seeks to merge with Sagicor, the preferred bidder for Clico’s traditional insurance portfolio, as announced by Finance Minister Colm Imbert in February, even though its bid was lower than the competitor, Maritime.

Last December, Sagicor said the merger between Alignvest and themselves would create a new enterprise worth US$900 million, as it assured shareholders and customers the transaction would not affect operations in the Caribbean or the US. Approval was granted on February 1 by the Supreme Court of Bermuda, where Sagicor is incorporated, to convene the meeting for shareholders to consider or approve any changes, to the “scheme of arrangement” relating to the “business combination” of Sagicor and Alignvest in a deal worth US$536 million.

As a result of the merger, Sagicor had to delist from the Barbados and TT stock markets and list on the Toronto Stock Exchange. News of the merger, announced last November, coincided with the announcement that Sagicor would acquire Scotiabank’s life insurance operations in Jamaica and TT, which would fall under the ownership of the new corporate entity.

JMMB is a Jamaican broker-dealer company with operations in TT and the Dominican Republic. In their announcement, Alignvest quoted JMMB Group CEO Keith Duncan as saying: “We are excited about the prospects of what this stake in Alignvest will present for JMMB. As a pioneering financial institution, we are always seeking out opportunities that will add value to our stakeholders. In that vein, we are confident that having such a stake in a regional market leader will augur well for the future growth and financial performance of the JMMB Group.”

Dodridge Miller, president and CEO of Sagicor, is also quoted in the release as saying: “JMMB’s investment is a significant vote of confidence in the strategic direction of Sagicor, and a strong conviction of our ability to continue to grow the company while delivering attractive returns to shareholders.”

As part of the deal JMMB will have the right to nominate up to two directors – Duncan, the CEO, and Archibald Campbell, JMMB’s chairman – to serve on the new Sagicor board, increasing its size to 14 directors.