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Proposed Acquisition Of The Alexander Forbes Individual Client Administration Business
Sanlam Limited
(Incorporated in the Republic of South Africa)
Registration number 1959/001562/06
JSE share code: SLM
A2X share code: SLM
NSX share code: SLA
ISIN: ZAE000070660
(“Sanlam”)
PROPOSED ACQUISITION OF THE ALEXANDER FORBES INDIVIDUAL CLIENT
ADMINISTRATION BUSINESS
1. INTRODUCTION
The board of directors of Sanlam is pleased to announce the conclusion of agreements with
Alexander Forbes Group Holdings Limited (“Alexander Forbes”) which will result in Sanlam Life
Insurance Limited, (“Sanlam Life”), a wholly owned subsidiary of Sanlam, acquiring 100% of
Alexander Forbes’ Individual Client Administration business (Alexander Forbes Individual Client
Administration Proprietary Limited and its two wholly owned subsidiaries, Alexander Forbes Retail
Client Administration Proprietary Limited and Alexander Forbes Nominees Proprietary Limited,
collectively the AFICA Group) (the “Proposed Transaction”).
Alexander Forbes is an associate of African Rainbow Capital Financial Services Proprietary
Limited (“ARC FS”) a wholly owned subsidiary of Ubuntu-Botho Investments Proprietary Limited
(“UBI”) which is, for purposes of the Listings Requirements of the JSE Limited (“JSE”), a material
shareholder in Sanlam.
The Proposed Transaction is therefore deemed a small related party transaction in terms of the
Listings Requirements of the JSE following the aggregation of transactions entered into over the
past 12 months between Sanlam and entities related to UBI. These transactions include the
acquisition of African Rainbow Life and the acquisition of the group risk and retail life businesses
of Alexander Forbes Life Limited by Sanlam Life.
2. RATIONALE FOR THE PROPOSED TRANSACTION
Glacier by Sanlam, a wholly owned subsidiary of Sanlam Limited and leading investment platform
in South Africa, will take full responsibility for the business from effective date. The Proposed
Transaction will enhance Sanlam’s competitiveness in respect of the provision of LISP services
and provide individual clients of Alexander Forbes with an enhanced experience through
improved administration and user functionality that is enabled by the technological capability of
the Glacier system. Through the implementation of the Proposed Transaction, a comprehensive
set of Alexander Forbes’ individual client products covering both retirement and savings needs
will be administered on the Glacier platform.
CONFIDENTIAL
`
3. OVERVIEW OF THE TRANSACTION
3.1. STRUCTURE AND ANCILLARY AGREEMENTS
The AFICA Group is a South African administration business that offers retail and institutional
investors access to a wide variety of retirement and savings solutions. As per the Alexander
Forbes audited annual financial statements for the year ended 31 March 2021, prepared in terms
of IFRS, the net asset value, excluding the investment in subsidiary (R68 million) of the AFICA
Group on 31 March 2021 was R52 million and the profit after tax for the year ended
31 March 2021 was R27 million.
The Proposed Transaction will be settled in cash by Sanlam for a purchase consideration of R200
million; consisting of an upfront amount of R160 million and a deferred amount of R40 million.
The deferred amount is payable on the second anniversary of the closing date or on the complete
and successful migration of clients and customers to the Glacier investment platform, whichever
occurs first.
Alexander Forbes and Sanlam will also enter into a relationship agreement (the “Relationship
Agreement”) in terms of which Alexander Forbes will continue to play an important role in
developing solutions that reflect its best advice model. Alexander Forbes’ living annuity and
endowment solutions will be administered by Glacier through binder and outsourced functions.
3.2. CONDITIONS TO AND KEY TERMS OF THE PROPOSED TRANSACTION
The Proposed Transaction is subject to certain suspensive conditions, including but not limited to
the relevant approvals from the competition authorities and other regulatory authorities (including
the Prudential Authority), the entry into a transitional services agreement to allow for a smooth
migration and integration of the AFICA Group business into Glacier, the entry into the Relationship
Agreement and the entry into other ancillary agreements.
The definitive transaction agreements to give effect to the Proposed Transaction contain
warranties and indemnities customary for transactions of this nature.
3.3. INDEPENDENT FAIRNESS OPINION
As indicated in paragraph 1 above, the Proposed Transaction is categorised as a small-related
party transaction in terms of paragraph 10.7 of the Listings Requirements of the JSE.
Accordingly, the Sanlam Board is required to provide the JSE with written confirmation from an
independent professional expert confirming that the terms of the Proposed Transaction are fair
insofar as Sanlam shareholders are concerned (the “Fairness Opinion”).
The Sanlam Board appointed Deloitte & Touche (South Africa) (“Deloitte”) as an independent
professional expert to provide it with the Fairness Opinion.
CONFIDENTIAL
`
Deloitte has furnished an opinion to the Sanlam Board confirming that the terms of the Proposed
Transaction are fair insofar as the Shareholders are concerned. This opinion has been provided
to the JSE.
Once approved by the JSE, the Fairness Opinion of Deloitte will be made available for inspection
at Sanlam’s registered office, 2 Strand Road, Bellville Cape Town, 7530, for a period of 28 days
from the date of release of this announcement. It will also be made available during this period on
request by email from Sanlam’s Company Secretary at Sana-Ullah.Bray@sanlam.co.za.
4. EFFECTIVE DATE
The effective date of the Proposed Transaction will be dependent on the fulfilment of the
suspensive conditions to the Proposed Transaction and is expected to occur during the first half
of 2022.
Bellville
6 December 2021
Enquiries
Sanlam Investor Relations
Phone: +27 21 947 8455
E-mail: ir@sanlam.co.za
Sponsor to Sanlam
The Standard Bank of South Africa Limited
Legal Advisers to Sanlam
Glyn Marais Incorporated
Nortons Inc
Independent Professional Expert
Deloitte & Touche (South Africa)
Date: 06-12-2021 07:32:00
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