- Sanlam Life plans to acquire a 25% stake in African Rainbow Capitals Financial Services Holdings (FSH) for $135 million.
- ARC FSH will own 100% of ARC Financial Services Investments post-deal, with Sanlam contributing $135 million in shares and cash.
- Sanlam agrees to pay up to $3.92 million in an outperformance fee if ARC FSHs investment in Tyme Investments exceeds targets by June 2028.
Sanlam Life, a subsidiary of Africas top insurer Sanlam has announced plans to acquire a 25 percent stake in African Rainbow Capital (ARC)s Financial Services Holdings (FSH) a fully black-owned and -controlled investment company led by Africa's first Black billionaire, Patrice Motsepe.
This deal valued at $135 million aims to strengthen Sanlams influence in the financial services sector and deepen its partnership with African Rainbow Capital (ARC).
According to the SENS announcement today , Sanlam Life will acquire one-fourth of ARC FSH's stake from African Rainbow Capital Investments in a deal involving a cash subscription of R2.41 billion ($135 million) for shares, and the transfer of Sanlams 25 percent interest in ARC Financial Services Investments (ARC FSI), valued at R1.49 billion ($83.43 million), to ARC FSH.
African Rainbow Capital Investments (ARCI) join forces with Sanlam LifeARC FSH, which holds investments in Tyme Bank, AI Fund, CrossFin, and Ooba, will become the 100 percent owner of ARC FSI post-transaction which is expected to close by Aug. 31, 2024, pending regulatory approvals, with interest accruing at the prime rate if delayed.
Sanlam has agreed to pay ARC up to R70 million ($3.92 million) in an outperformance fee if ARC FSHs investment in Tyme Investments (Asia) exceeds a specific hurdle rate by June 2028. Prior to the deal, ARC FSH was 50.1 percent owned by ARC and 49.9 percent owned by the ARC Fund.
