RMI sells unit to Santam

Published Aug 24, 2016

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Johannesburg - Rand Merchant Investment Holdings (RMI) said Tuesday it had reached an agreement on the sale of 100 percent of the issued share capital of RMB-SI Investments (RMB-SI), its structured insurance business to Santam for an undisclosed amount.

RMI said it believed that RMB-SI would be best served under the Santam banner as it suited its profile better.

The company said after a successful 23-year partnership with RMB-SI's entrepreneurial management team and strategic co-investor, New Seasons, the business would be more optimally positioned within a large insurance group.

As its new shareholder, Santam would provide RMB-SI’s business with an efficient infrastructure while retaining the entrepreneurial culture and independence at the core of RMB-SI's ethos.

Expanded

RMI is a listed insurance investment holding firm that holds a diversified portfolio of premier insurance brands in South Africa and abroad.

RMI said it had over the last few years re-activated and expanded its portfolio, and that in addition to new investments, it wanted to be a long-term, active and value-adding ­shareholder to its portfolio companies.

It said its objective was to produce superior returns for its shareholders and offer dynamic and active portfolio management.

Read also:  Santam’s shares drop 3% after update

Santam said it was buying all of RMB-SI with the exception of its 22.4 percent holding in Truffle Capital. Rand Merchant Investments said it would affiliate Truffle into its asset management business.

“RMB-SI has over the years pioneered an innovative specialist insurance structuring business, offering its partners and clients individually designed and innovative insurance solutions,” Santam said in a statement. Last week Santam announced it was venturing into Angola through Sanlam Emerging Markets through infrastructure project development.

RMB-SI has over the years pioneered a specialist ­insurance structuring business offering and has established new businesses, such as the recently formed Risk Finance Division, Credit Insurance Solutions division and Credit Innovation, all of which are emerging as potential market leaders in their respective fields.

Over the last two decades the business has consistently produced superior returns on capital ratios and RMI has achieved an internal rate of return on its RMB-SI investment in excess of 60 percent.

The conclusion of the transaction is subject to regulatory approval.

RMI shares gained 0.87 percent on the JSE yesterday and closed at R43 a share, while Santam went up 1.5 percent to close at R223.50.

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