October 4, 2021
By Nicholas Saminather
TORONTO (Reuters) – Sun Life Financial said it will acquire US dental services provider DentaQuest for $ 2.48 billion in its biggest deal in two decades, becoming the latest grossing Canadian insurance company pursuing growth outside of the US. its internal market.
The deal to acquire the second-largest U.S. dental services provider, with more than 33 million members, will add about $ 100 million to underlying U.S. income in its first full year after closing, second-largest executives said. life insurance company of Canada. on an analyst call Monday.
Sun Life announced the deal on Sunday.
It is the largest acquisition since Sun Life bought Clarica Life Insurance, from where CEO Kevin Strain joined the company, for CAD $ 7.3 billion ($ 5.8 billion) in 2002, according to a spokesperson.
Shares of Sun Life were up 1.7% to CAD $ 66.20 in morning trading in Toronto, compared with a 0.4% decline in the equity benchmark.
After the expected $ 60 million synergies, the company is expected to add 24 Canadian cents to the underlying earnings per share and 50 basis points to the return on equity, Canaccord Genuity analyst Scott Chan said, adding that the deal it should “support the business of Sun Life”. peer-leading ROE metrics. ”
The deal follows a number of other acquisitions in recent years by Canadian life insurers, which, facing limited growth at home and holding record levels of capital, are pursuing deals overseas, particularly in the United States recently.
Great-West Lifeco was the latest, and agreed in July to pay CAD $ 4.45 billion to purchase Prudential Financial Inc.’s full-service retirement business.
Sun Life itself has expanded into the US group’s benefits business, albeit with minor deals, including that of medical intelligence and health navigation provider PinnacleCare and the Maxwell Health benefit platform https://www.prnewswire.com/ news-releases / sun-life-financial-acquires-maxwell-health-300659355.html.
He previously signaled a willingness to increase his group’s benefits and stop-loss activity, which protects against unpredictable losses.
The agreement gives Sun Life “flexibility to maneuver” in the future and to make further investments, particularly in an effort to expand its pharmacy stop-loss business and to leverage potential expansions of health services and financing in the States. United, executives said on the call.
Sun Life will incur transaction and integration costs of $ 250 million, executives said.
($ 1 = Canadian dollars 1.2562)
(Reported by Nichola Saminather; edited by Chizu Nomiyama and Emelia Sithole-Matarise)
[ https://newswarden.com/sun-life-to-buy-u-s-benefits-firm-dentaquest-for-2-5-billion-in-biggest-deal-since-2001/ https://d26toa8f6ahusa.cloudfront.net/wp-content/uploads/2021/07/30214746/a-quiet-place-part-2-bigs-16.pdf