Quilter to sell its international business to Utmost Group for £463 million

on Apr 1, 2021
  • Quilter to sell its international business to Utmost Group for £463 million.
  • The wealth management firm's board has already approved the deal.
  • The acquisition is likely to generate net proceeds of £450 million for Quilter.

In an announcement on Thursday, Quilter plc (LON: QLT) said it will offload its international business for £483 million to Utmost Group (specialist life assurance company) – a move that will help it expand focus on its wealth management segment in the United Kingdom. CEO Paul Feeney said on Thursday:

“The sale allows us to focus on accelerating our growth and efficiency plans as well as further simplifying and focusing our business around its core UK high net worth and affluent customer proposition. It also gives us the ability to deliver a further meaningful capital distribution to shareholders.”

Quilter shares that you can learn to buy online here jumped close to 2% in premarket trading on Thursday and gained another 2.5% later in the day. The stock is now trading at £1.67 per share versus £1.55 per share at the start of the year.

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Quilter’s board has already approved the deal

Quilter also highlighted that it has already received approval from its board of directors to sell the international business. The deal, however, is subject to regulatory approval. Upon completion, Utmost International will add 90 thousand policies and assets worth £22 billion under administration.

In separate news from Europe, Credit Suisse said on Thursday that it expects to recover more investments linked to Greensill.

Chief Executive Paul Thompson of Utmost commented on the news on Thursday and said:

“The acquisition confirms Utmost Group’s position as a leading insurance consolidator with £58bn of assets under administration and 600K customers on a Pro-forma basis and gives us an enhanced platform to pursue acquisitions.”

Net proceeds are likely to be £450 million

The net proceeds of roughly £450 million will contribute to Quilter’s full-year dividend. The company also said:

“Under Quilter’s continued ownership, Quilter International would have required investment to support further cost reduction in order to maintain profitability and facilitate cash distributions.”

The wealth management company said last year that its profit took a significant hit as net inflows plummeted from £500 million to £300 million – a 40% decline. Quilter’s announcement comes on the same day when Next plc said its pre-tax profit slumped to £342 million in fiscal 2021.

Quilter performed slightly downbeat in the stock market last year with an annual decline of close to 8%. At the time of writing, it is valued at £2.96 billion and has a price to earnings ratio of 33.81.

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