Black Star Holding Limited (BSHL), a wholly owned subsidiary of LeapFrog Strategic African Investment (LSAI), has acquired the minority shareholder in three subsidiaries of Enterprise Group.
The three subsidiaries are Enterprise Life, Enterprise Insurance and Enterprise Trustees.
BSHL takes over the ownership which hitherto belonged to Sanlam Emerging Market Proprietary Limited of South Africa (Sanlam).
Per the new arrangement, LeapFrog Investments will inject a cash of 180 million dollars.
Of the amount, 130 million dollars will replace Sanlam’s investment share while an additional 50 million dollars will be channeled into the growth of Enterprise Group.
A press release from LeapFrog Investment on the deal said, “With the new investment, Sanlam Emerging Markets Proprietary Ltd will exit its holding in three of Enterprise Group’s subsidiaries companies; namely Enterprise Life, Enterprise Insurance and Enterprise Trustees for USD 130 million. A further USD 50 million will be invested to fund Enterprise Group’s future growth.”
Commenting on the latest move, the Group CEO of Enterprise, Kelly Gadzekpo stated that its new partners will change the paradigm to enable the company launch into new markets within the short to medium term.
“Our partner brings a depth of insurance over a billion dollars worth of insurance transactions in Africa alone. They change the paradigm for us,” he said.
Mr. Gadzekpo further indicated that the change in partnership will not affect the current operations of the subsidiaries in question.
In his view, the move will also not result in any staff layoffs.
“Operationally nothing will change but over time we will develop a strategy of entering more aggressively into the West African sub-region… There is no impact on staff situation; as far as this partnership is concerned, nothing changes,” he assured.
Meanwhile the coming on board of BSHL is also expected to consolidate value for money for shareholders.
According to Mr. Gadzekpo, the estimated value of 250 million dollars has ‘unlocked the real value for Enterprise Group’ at a time that the Group’s capitalisation on the Ghana Stock Exchange is having difficulty to get even 40 million dollars.
Under the new partnership agreement, there have been new stakes as follows; Enterprise Group now owns 59% in Enterprise Life up from 51% while Black Star Holdings owns 41% compared to 49% formerly owned by Sanlam.
Also, for Enterprise Insurance, Enterprise Group owns 75% up from 60 % while Black Star Holdings owns 25% down from 40% formerly owned by Sanlam.
For Enterprise Trustee, Enterprise Group owns 80% up from 60% while Black Star Holdings owns 20% down from 40% formerly owned by Sanlam.
Doug Lacey who co-led the transaction with Norm Kelly on behalf of LSAI said, “Enterprise Group is a pioneer in delivering vital financial services to emerging consumers in Ghana. Its leading position in financial services, as well as dominance in insurance with over 28 per cent of the market, is a testament to the quality of the financial services it provides.”
LSAI is a separate account managed by LeapFrog Investments and in which Prudential financial, incorporated is a primary investor.
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By: Pius Amihere Eduku/citibusinessnews.com/Ghana