Sun Life to purchase U.S. advantages agency DentaQuest for $2.5 bln in greatest deal since 2001

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TORONTO, Oct 4 (Reuters) – Sun Life Financial (SLF.TO) mentioned it can purchase U.S. dental advantages supplier DentaQuest for $2.48 billion in its greatest deal in 20 years, turning into the most recent cashed-up Canadian insurance coverage firm pursuing progress outdoors its dwelling market.

The deal to accumulate the United States’ second-largest dental advantages supplier, with greater than 33 million members, will add about $100 million to its U.S. underlying revenue in its first full-year after closing, executives at Canada’s second-largest life insurer mentioned on an analyst name on Monday.

Sun Life introduced the deal late on Sunday.

It is the largest acquisition since Sun Life purchased Clarica Life Insurance, from the place Chief Executive Kevin Strain joined the corporate, for C$7.3 billion ($5.8 billion) in 2002, based on a spokeswoman.

Sun Life shares rose 1.7% to C$66.20 in morning buying and selling in Toronto, in contrast with a 0.4% decline within the inventory benchmark (.GSPTSE).

After synergies, anticipated to be $60 million, the agency is anticipated so as to add 24 Canadian cents to underlying earnings per share and 50 foundation factors to its return on fairness, Canaccord Genuity analyst Scott Chan mentioned, including the transaction is “expected to support Sun Life’s peer-leading ROE metrics.”

The deal follows a slew of different acquisitions in recent times by Canadian life insurers, who, going through restricted progress at dwelling and holding report ranges of capital, pursue offers abroad, significantly within the United States lately.

Great-West Lifeco was the most recent, agreeing in July to pay C$4.45 billion to purchase Prudential Financial Inc’s (PRU.N) full-service retirement enterprise. learn extra

Sun Life itself has been increasing within the U.S. group advantages enterprise, albeit with smaller offers, together with that of U.S. medical intelligence and health-care navigation supplier PinnacleCare and advantages platform Maxwell Health.

It had beforehand flagged an urge for food to develop its group advantages and stop-loss enterprise, which protects in opposition to unpredictable losses.

The deal provides Sun Life the “flexibility to maneuver” in future and make further investments, significantly because it seeks to broaden its pharmacy stop-loss enterprise in addition to to reap the benefits of potential expansions of well being care companies and funding within the U.S., executives mentioned on the decision.

Sun Life will incur transaction and integration prices of $250 million, the executives mentioned.

($1 = 1.2562 Canadian {dollars})

Reporting By Nichola Saminather; Editing by Chizu Nomiyama and Emelia Sithole-Matarise

The Sun Life Financial logo is seen at their corporate headquarters of One York Street in Toronto, Ontario, Canada, February 11, 2019.  REUTERS/Chris Helgren//File Photo