The shareholders of Clientèle Life, a company that provides affordable financial services products, will vote on the acquisition of fast-growing micro-insurer Emerald Life, which is valued at R600 million, at a meeting on December 13.
Clientèle plans to acquire 100% of the shares in Emerald Life, which supplies affordable funeral insurance products to the lower- to middle-income market segments via a national advisor distribution channel. The price would be paid by the issue of preference shares.
Emerald Life, with an embedded value of R600m, has over 18 branches nationwide and a head office in Bellville, Western Cape. It comprises a management team, 380 permanent employees, and about 3 500 independent sales advisers.
Clientèle said its October 2023 acquisition of 1Life Insurance (RF) had further extended its expertise in the mass market segment with a strong focus on “treating clients well.”
The acquisition of Emerald Life announced this month would also add to Clientèle’s expertise in the mass market segment and present a number of strategic benefits for Clientèle.
For instance it would improve scale and enhance future value creation for all customers, employees, shareholders, and other stakeholders, Clientèle said.
Clientèle’s memorandum of incorporation would be changed so that it could create 6 000 preference shares required to fund the deal. Clientèle’s share price traded at R12.37 on Friday afternoon, over 17% higher than a year ago.
In the six months to December 31, 2023, Clientèle’s net profit net 37% to R125.5m, and insurance revenue was down 5% to R972.5m, but the company remained in a sound solvency and liquidity position and continued to generate strong positive cash flows. At the year-end to June, net profit fell 4%, and the value of new business of R220.3m had decreased by 10% year-on-year. - Edward West