Regulators okay $130m ownership change in Enterprise Group

Regulators in the capital and insurance market have approved a buyout in the Enterprise Group that will see South African insurer, Sanlam, exit the group after successfully selling its stake in the subsidiaries to Prudential Financial Inc. of America.

Black Star Holdings, Prudential Financial’s special purpose vehicle (SPV), managed by Leapfrog Investments, led the acquisition process, which was approved by the Ghana Stock Exchange (GSE) and the National Insurance Commission (NIC) on June 23.

Prudential, a fortune 500 company, paid $130 million for Sanlam’s stakes in Enterprise’s three subsidiaries.

This means that Prudential Financial Inc. will now own 49 per cent of Enterprise Life and 40 per cent each in Enterprise Trustees and Enterprise Insurance, the pensions and general insurance wings of the group, respectively.

In an interview ahead of the approval on June 23, the group Chief Executive Officer of Enterprise, Mr Keli Gadzekpo, said the deal marked a new beginning in the life of the company.

After more than 12 years of partnership, the CEO said both sides had come to the understanding that the time had come for them to chart a new course, hence the decision by Sanlam to sell to a new company.

Opportunity to grow

Discussions on the sale took about one year to conclude, Mr Gadzekpo said, explaining that the situation leading to the exit was that of a mutual understanding.

It was instigated by Enterprise’s desire to grow and expand into other business lines and countries, a strategy Sanlam was hesitant to endorse.

As a result, the CEO said the sale set the stage for the group to grow the brand into other countries, with West Africa being the first target.

“They have pledged capital of up to $50 million for us to use for our growth agenda,” he said, adding that funds would be raised through various strategies that would be approved by shareholders.

On whether or not the exit will create a vacuum for group, Mr Gadzekpo said, “we are getting proximity to an even bigger partner  than Sanlam.”

As a financial advisory firm with over $1 trillion assets under management, he said Prudential Financial was a mega player that is several times larger than Sanlam.

In spite of its influence in the financial market, the partnership with the Enterprise Group represents Prudential Financial’s first entry into Africa, where it now hopes to leave a legacy.

Mr Gadzekpo was confident the technical expertise of the company would help propel the group to another level in its growth agenda.

Beyond the changes in ownership, he said nothing would change in the Enterprise brand “except our ability to do more.”

He also added that the new shareholders would not be making changes to the management team, given that “Enterprise is not a broken vessel.”

“They are here voting in the management capacity of Enterprise. Enterprise is not in trouble; they came and said we like what you are doing. Can we partner you? And we opened the door for them,” he said.

The group was listed on the GSE in 1992 and the CEO said it would remain on the exchange to enable its shareholders to enjoy and benefit in the gains to be made.