Firm announcement no. 11/2021
Alm. Model A/S to amass the Danish enterprise of Codan Forsikring A/S
Alm. Model A/S (“Alm. Model”) is happy to announce that it has entered right into a binding settlement with Intact Monetary Company (“Intact”) and Tryg A/S (“Tryg”), via their jointly-owned subsidiary Scandi JV Co 2 A/S (“Vendor“), whereby Alm. Model will purchase Codan Forsikring A/S’s (“Codan Forsikring”) Danish enterprise (the “Acquisition”). The Acquisition is at the moment anticipated to finish throughout the first half of 2022 following the switch by Intact and Tryg of the Danish enterprise of Codan Forsikring right into a Danish authorized entity integrated for such objective (“Codan DK”).
Chairman of the Board of Administrators Jørgen Hesselbjerg Mikkelsen:
“With the acquisition of Codan DK, the Board of Administrators units a transparent strategic course, considerably enhancing the corporate’s long-term aggressive place. We are going to double our enterprise quantity and turn out to be one of many largest gamers within the engaging Danish non-life insurance coverage market with a sturdy capital place and very thrilling growth alternatives going ahead. We stay up for welcoming prospects and workers from Codan DK. For our shareholders, we consider that the acquisition marks a sexy transaction that can create vital worth within the coming years.”
CEO Rasmus Werner Nielsen:
“Alm. Model and Codan are an ideal match. We are going to create Denmark’s second-largest non-life insurance coverage firm and mix the perfect of each corporations beneath one roof. The acquisition brings collectively two well-reputed insurance coverage corporations in a transaction that can create a single main and powerful Danish insurance coverage group with greater than 700,000 prospects and a transparent ambition of offering best-in-class options for our prospects. We stay up for additional creating the sturdy traditions of the 2 corporations in an much more aggressive enterprise, able to take the lead in creating the perfect insurance coverage merchandise, create new alternatives and duties for our expert workers and generate much more worth for our shareholders by leveraging substantial economies of scale and our strengthened market place.”
- At completion of the Acquision, Alm. Model will purchase 100% of the issued and excellent shares in Codan DK into which the enterprise of Codan Forsikring’s Danish enterprise may have been transferred previous to completion.
- The consideration beneath the phrases of the Acquisition values Codan Forsikring’s Danish enterprise at roughly DKK 12.6 billion, payable in money. The consideration shall be adjusted on a capital impartial foundation with a purpose to account for any adjustments in Codan’s personal funds publish the de-merger and to account for the earnings generated between the de-merger date and completion.
- The Acquisition is at the moment anticipated to finish throughout the first half of 2022, topic to sure situations, together with receipt of approvals from the related regulatory and antitrust authorities in addition to the completion of the Rights Subject and the separation of Codan Forsikring’s Danish enterprise into Codan DK.
- Synergies are anticipated to succeed in roughly DKK 600 million pre-tax to be totally realised by 2025, and the Acquisition is predicted to generate a return on funding (ROI) of about 7% and excessive teenagers EPS accretion by 2024 primarily based on totally realised synergies.
- Alm. Model intends to launch a rights subject to boost gross proceeds of roughly DKK 11.6 billion (the “Rights Subject”) to finance part of the Acquisition. The Rights Subject is predicted to be launched within the second half of 2021 and Alm. Model has entered right into a standby underwriting settlement, topic to sure situations, with J.P. Morgan AG (“J.P. Morgan”), Nordea Danmark, Filial af Nordea Financial institution Abp, Finland (“Nordea”) and Skandinaviska Enskilda Banken, Danmark, filial af Skandinaviska Enskilda Banken AB (publ) Sverige (“SEB”). As such, the Rights Subject will, topic to sure situations, be totally underwritten by J.P. Morgan, Nordea and SEB.
- Alm. Model af 1792 f.m.b.a. (the “Affiliation”) has signed an irrevocable subscription enterprise in the direction of Alm. Model, J.P. Morgan, Nordea and SEB beneath which the Affiliation has dedicated to subscribe for brand spanking new shares within the Rights Subject for a complete subscription quantity of DKK 3.750 billion and to additional subscribe for brand spanking new shares on a money impartial foundation. The Affiliation at the moment holds 58% of the shares in Alm. Model. Following the Rights Subject, the Affiliation’s shareholding in Alm. Model is predicted to lower beneath 50% of the shares in Alm. Model with the intention to extend the possession to above 50% of the shares in Alm. Model over time.
Following the Acquisition, Alm. Model will turn out to be the second-largest non-life insurance coverage firm in Denmark and the most important non-life insurance coverage firm targeted solely on the Danish market with a market share of roughly 18% and a extra diversified buyer portfolio, estimated at about 700,000 households and company prospects. Alm. Model will strengthen its product providing via the growth with Codan’s insurance coverage actions and the Privatsikring partnership and can step up its actions within the company buyer space supported by Codan’s sturdy buyer relations with quite a lot of massive corporates.
On a professional forma foundation for FY 2020, Alm. Model’s (together with Codan DK) whole premium funds for Non-life quantity to DKK 10.9 billion.
Doubling its enterprise quantity, Alm. Model expects to have the ability to realise substantial synergies and economies of scale from a standard IT platform, procurement, administration, lease prices and shared features, and claims administration, thereby enhancing the profitability and aggressive energy of the mixed firm. The pre-tax synergies are anticipated to whole round DKK 600 million, and are anticipated to be totally realised by 2025, phased in with roughly DKK 90 million by 2022, DKK 240 million by 2023, DKK 450 million by 2024 and DKK 600 million by 2025. Value efficiencies are anticipated to symbolize roughly 63% of the overall synergies, whereas synergies associated to claims processing and claims funds are anticipated to symbolize roughly 37%. As well as, income synergies via cross-selling and sharing of greatest practices are anticipated so as to add additional advantages over time. To be able to realise the synergies, Alm Model expects to incur restructuring and transaction prices of roughly DKK 1.0 billion after tax.
The mixed firm will profit from bigger enterprise volumes by with the ability to supply a holistic set of best-in-class merchandise, create larger funding capability, and generate enhanced monetary efficiency and vital worth creation which in flip will profit the corporate’s prospects, enterprise companions, workers and shareholders.
Following the Acquisition, the mixed firm will preserve a sturdy solvency place with a professional forma Solvency II ratio of roughly 200%.
The Acquisition is predicted to ship worth for shareholders with an anticipated ROI of roughly 7% and excessive teenagers EPS accretion by 2024, due to this fact creating vital potential to extend the odd dividend over time.
About Codan Forsikring’s Danish enterprise
Codan is headquartered in Copenhagen and has roughly 1,000 workers. The corporate was established in 1916 and is the fourth-largest non-life insurance coverage firm in Denmark with a market share of roughly 9%. Codan assists round 240,000 households and 50,000 company prospects.
About Alm. Model
Alm. Model is headquartered in Copenhagen and has roughly 1,400 workers. The corporate was established in 1792 and is the third-largest non-life insurance coverage firm in Denmark with a market share of roughly 9%. Non-life Insurance coverage assists round 320,000 households and 90,000 company prospects. Life Insurance coverage assists round 70,000 prospects.
Webcast and convention name
Alm. Model will host a convention name (in English) for traders and analysts immediately, Friday, 11 June 2021 at 14.30 CET. The convention name and presentation shall be accessible from Alm. Model’s investor web site.
Convention name dial-in numbers for traders and analysts:
Denmark: +45 8233 3194
United Kingdom: +44 333 300 9031
USA: +1 646 722 4957
Hyperlink to webcast: Alm. Brand Investor Call
Monetary and authorized advisors
Deloitte Company Finance is appearing as monetary advisor and Accura Advokatpartnerselskab is appearing as authorized advisor to Alm. Model in reference to the Acquisition.
Please direct any questions relating to this announcement to:
Traders and fairness analysts:
Senior Investor Relations Officer
Mikael Bo Larsen
Cell no. +45 5143 8002
Head of Media Relations
Cell no. +45 2499 8455
This announcement consists of “forward-looking statements”, which embrace all statements apart from statements of historic info. Phrases equivalent to “intend”, “assess”, “count on”, “might”, “plan”, “estimate” and different expressions involving
indications or predictions relating to future growth or developments, not primarily based on historic info, determine forward-looking statements and mirror Alm. Model’s beliefs and expectations and contain quite a lot of dangers, uncertainties and assumptions which may trigger precise occasions and efficiency to vary materially from any anticipated future occasions or efficiency expressed or implied by the forward-looking assertion. The knowledge contained on this press launch is topic to alter with out discover and, besides as required by relevant regulation, Alm. Model doesn’t assume any accountability or obligation to replace publicly or assessment any of the forward-looking statements contained in it and nor does it intend to. You shouldn’t place undue reliance on forward-looking statements, which converse solely as of the date of this announcement. Because of these dangers, uncertainties and assumptions, you shouldn’t place undue reliance on these forward-looking statements as a prediction of precise future occasions or in any other case.
J.P. Morgan, Nordea and SEB don’t settle for any accountability in any way and make no illustration or guarantee, specific or implied, for the contents of this announcement, together with its accuracy, completeness or verification or for every other assertion made or presupposed to be made by any get together referred to on this announcement, and nothing on this announcement is or shall be relied upon as a promise or illustration on this respect, whether or not as to the previous or future. J.P. Morgan, Nordea and SEB accordingly disclaim to the fullest extent permitted by regulation all and any accountability and legal responsibility, whether or not arising in tort, contract or in any other case, which they could in any other case have in respect of this doc and any such assertion.
J.P. Morgan, Nordea and SEB are appearing solely for Alm. Model and nobody else in reference to the potential Rights Subject. J.P. Morgan, Nordea and SEB won’t regard every other individual as a shopper in relation to the potential Rights Subject and won’t be accountable to anybody apart from Alm. Model for offering the protections afforded to its shoppers nor for the giving of recommendation in relation to the potential Rights Subject.
This announcement shouldn’t be supposed to, and doesn’t, represent or type a part of any supply, invitation or solicitation of any supply to buy, in any other case purchase, subscribe for, promote or in any other case get rid of any securities or the solicitation of any vote or approval in any jurisdiction. Any supply (if made) shall be made solely by sure supply documentation which can comprise the total phrases and situations of any supply (if made), together with particulars of how such supply could also be accepted.
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