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KKR to acquire Global Atlantic
Posted on Wednesday, 08 July 2020 11:24
KKR & Co has agreed to pick up Global Atlantic Financial Group, a leading retirement and life insurance company.
The investment bank is offering to pay an amount equal to 1.0x the target’s book value at the date of closing, which stood at USD 4.40 billion at 31st March 2020.
KKR expects to finance the transaction, net of equity roll-over participation, from a combination of cash on hand, proceeds from potential minority co-investors and the issuance of new debt and or equity.
The investment in Global Atlantic will be held on the acquiror’s balance sheet and through a proprietary vehicle established for others to invest alongside its balance sheet, not in any client funds.
Completion is slated to complete in early 2021, subject to regulatory approvals, among other conditions.
Global Atlantic serves more than two million policyholders through its retirement and life insurance products.
It is one of the largest fixed rate and fixed indexed annuity providers in the US, offering services for individuals through a network of banks, broker-dealers and insurance agencies, as well as life cover for corporations.
Joseph Bae and Scott Nuttall, co-presidents of KKR, said: “This transaction is highly strategic for KKR — it meaningfully expands our base of permanent capital, further diversifies and scales our business, and significantly grows our position within the insurance industry, which has been increasing its exposure to alternative investment strategies.
“Insurance providers play a critical role in supporting the financial security for millions of individuals. This transaction positions KKR to support Global Atlantic policyholders through our global network and asset management and origination capabilities.”
The global insurance industry, with over USD 30,000 billion of assets, is a key focus for the global investment firm, which believes the addition of the target will expand the existing business that includes managing USD 26.00 billion of assets.
At 31st March 2020, KKR’s assets under management will increase from USD 207.00 billion to USD 279.00 million as a result of the acquisition.
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