Alexforbes said the acquisition accelerated its digital journey and supported its strategy of transforming into the most impactful provider of advice to retirement fund members. File
Alexforbes’s shares yesterday fell after it announced the purchase of digital wealth platform OUTvest from a unit of subsidiary of OUTsurance Group Holdings (OGL) for an undisclosed amount as it continues to snap up acquisitions.
Alexforbes said the acquisition accelerated its digital journey and supported its strategy of transforming into the most impactful provider of advice to retirement fund members.
Alexforbes said Alexander Forbes Limited, a wholly-owned subsidiary of the company, had concluded a binding agreement with OUTsurance Holdings Limited (OHL), an 89.8%-held subsidiary of OGL, for the acquisition of 100% of the shares in OUTvest, subject to regulatory approvals.
The effective date of the acquisition was expected to occur towards the end of March 2024.
Alexforbes shares slid 2.4% to R6.10, while OGL’s investors cheered the move, which saw its shares up 0.55% to R41.80.
Both companies said in JSE Stock Exchange News Statements (SENS) that the transaction fell below the threshold for categorisation in terms of the JSE Limited Listings Requirements and, therefore, this was voluntary announcements.
OUTvest is an award-winning digital wealth platform launched in 2017 and was built to enable the distribution of a range of high-quality, simple and low-cost wealth products, through direct and intermediated channels to a wide range of customer segments including mass and mass affluent customers to help them achieve their financial goals.
The platform integrates automated advice, human advice, administration, and asset management into a seamless digital wealth solution that is designed for scale.
“Should the necessary regulatory approvals be obtained, and commercial conditions precedent fulfilled, OUTvest and Alexforbes will collaborate to ensure a seamless transition and minimal disruption for customers, employees and suppliers of OUTvest,” Alexforbes said.
Alexforbes CEO Dawie de Villiers said in June as he delivered the groups results for the year to March 31 that the past year had been eventful across all aspects of the business, as it began to implement transactions, and drove organic new business growth that had, in turn, sparked innovation across their digital estate.
The group’s membership base at 1 088 050 had increased 26% year on year, driven by new business and acquisitions.
He said at the time that the core business had been reconfigured, was focused, and working well, which provided a solid foundation for building on growth in terms of new business and acquisitions..
During the past year, corporate transactions included the acquisition of EBS International, the acquisition of Sanlam's large standalone retirement fund administration business operations, the acquisition of the sale of the AFICA group to Sanlam-owned Glacier and the acquisition of Bidvest Wealth and Employee Benefits.
On June 1, 2023, Alexforbes acquired a majority interest in TSA Administration, an independent provider of institutional group risk insurance administration services.
Meanwhile, OGL, a growing, short-term insurance group operating across South Africa and Australia, referred its shareholders to the announcement released on SENS on August 2, where it had advised that, following a strategic review of OUTvest, the group had decided to consider a restructuring of OUTvest due to the sub-scale nature of this business.
OGL strategy is to scale its wider product set through all three major channels – digital, call centre and face-to-face.
OFL said Alexforbes had a strong track record in the South African investment landscape.
“OGL is confident that a business of this stature will be a good fit for the OUTvest investment platform to ensure its full potential is realised. Should the necessary regulatory approvals be obtained and commercial conditions precedent be fulfilled, OUTvest and Alexforbes will collaborate to ensure a seamless transition and minimal disruption for customers, employees and suppliers of OUTvest,” it said.
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