CBL Corporation Limited has been given the regulatory approval to proceed with its $150 million strategic acquisition of its largest single client and France’s largest specialist producer of construction-sector insurance Securities and Financial Solutions (SFS).
The international credit and financial risk insurer has been granted the regulatory approval by the Commissariat aux Assurances in Luxembourg (CAA). The CAA approval, which also applies to SFS’ claims management operation IMS Expert Europe SA (IMS), fulfils the most significant outstanding condition precedent for the acquisition.
Peter Harris, CBL managing director, said the strategic acquisition would support the company’s growth ambitions in Europe, and would provide opportunities for several companies within the CBL Group in Europe.
Patrice Gilles, SFS principal owner, said: “I’m delighted that the regulatory process has been satisfied, and I expect that under the new ownership of CBL, both SFS and CBL will continue to grow to new levels. I am extremely pleased to see SFS as part of the strong and well established CBL Group where management and staff will continue to grow.”
Harris further commented on the acquisition: “This is the fifth acquisition CBL has done in Europe over the past 11 years, with four different regulators, and each one adds to CBL’s regulatory and governance experience. Our recently upgraded financial strength rating from AM Best to A- (Excellent) presents an opportunity to make CBL and SFS into even more significant players in the French construction insurance market, and will add to the quality of the Group’s business in Europe overall.”
CBL would retain the executive management of Antoine Guiguet as CEO of SFS, and Gérard Marichy as managing director of IMS. The two would maintain a 29% shareholding in SFS, with CBL owning the remaining 71%.
Gilles, on the other hand, would be paid out, and would not retain a shareholding, but would be appointed as chairman of an advisory panel for SFS.
CBL and SFS are now in the process of completing documentary formalities, satisfying final conditions precedent, and pre and post-acquisition accounting procedures, with Completion and Settlement proposed for just prior to year-end or early in the New Year.
Funding the acquisition is a combination of cash, bank, and vendor funding.
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