Sanlam Kenya, a financial services company listed on the Nairobi Securities Exchange, which mainly deals in insurance, investments and retirements schemes, has invested an additional 121.7 million shillings in equity in Sanlam General according to their annual report 2017.
Sanlam Kenya, then Pan Africa Insurance Holdings Limited (Pan Africa), first acquired 31,948,950 ordinary shares of Gateway Insurance, a 51.0 percent stake, in March 2015 for 561.0 million shillings.
The company also subscribed to additional shares in Gateway amounting to 139.7 million shillings to increase its shareholding to 56.5 percent in the same year. After the transaction, it renamed Gateway Insurance to Sanlam General.
The first and second transaction valued the company at 1.1 billion shillings and 1.2 billion shillings respectively. The acquisitions were carried out at a P/Bv multiple of 1.1x. The acquisition was a strategic move for the company to re-enter the general insurance market and to enable them to offer their clients with more financial solutions.
In 2016, Sanlam Kenya made an additional investment of 213.7 million shillings in Sanlam General, increasing their stake in the company to 67.6 percent.
The additional investment made in 2017 raises Sanlam Kenya’s total investment in the subsidiary to 1.0 billion shillings. The investment, however, left their ownership unchanged as the minority shareholders also made an additional investment of 66.5 million shillings.
Sanlam stated that its capital commitment in the unit is 496.6 million shillings as a result of an impairment charge of 539.6 million shillings which was recognized in the company’s statement of profit or loss for the year ended 31st December 2015, as a result of prior year adjustments passed in the accounting records of Gateway in 2015.