JOHANNESBURG - JSE-Listed independent financial services provider PSG Konsult has concluded an agreement to acquire the remaining stake of Absa Insurance and Financial Advisers’ (Aifa) unit, the commercial and industrial short-term insurance brokerage business, for an undisclosed amount.
PSG Konsult acquired Aifa’s unit through its subsidiary PSG Wealth Financial Planning.
The group said the acquisition fell below the threshold that requires disclosure in terms of the JSE Listings Requirements.
“However, the PSG Konsult board deemed it appropriate to inform shareholders in the interests of full transparency,” the group said.
The group said the acquisition would be funded by cash.
PSG Konsult said its core focus remained organic growth.
Dan Hugo, chief executive of distribution at PSG, said the acquisition would further enhance PSG Insure’s footprint across South Africa, strengthening their value proposition.
“We are very pleased to acquire this high-quality business, in addition to the business acquired in 2017,” Hugo said.
PSG Konsult first acquired part of the unit in September last year.
The group said the business consisted of 83 advisers and more than 31000 clients with a personal lines focus.
Yesterday, the company said the acquisition would be housed under PSG Insure. PSG also owns PSG Wealth and PSG Asset Management.
It said the transaction remained subject to a number of conditions, including regulatory approvals.
PSG Insure offers short-term insurance solutions for individuals and businesses, partnering with leading insurance providers to deliver a wide range of insurance options.
Hugo added that PSG Konsult’s core focus remained organic growth, but added that the group was open to selective acquisitions that would complement its overall client offering.
In the six months to end August, PSG Konsult delivered 10percent rate of growth in recurring headline earnings per share and return on equity of 21percent.
On its own PSG Insure achieved recurring headline earnings growth of 23percent, against the backdrop of a particularly difficult industry environment.
It achieved gross written premium growth of 19percent compared to a year before with net underwriting margin of 7.4percent.
PSG Konsult’s total assets under management increased to R193billion during the same period, comprising managed assets of PSG Wealth and PSG Asset Management of R157bn and R36bn respectively.
PSG shares rose 3.61percent on the JSE yesterday to close at R8.60.