UAE. The Abraaj Group (‘Abraaj’ or the ‘Group’), a leading investor operating in global growth markets, today announced that it has fully exited its shareholding in the leading African insurer, Saham Finances (‘Saham’ or the ‘Company’).
Abraaj sold a portion of its stake in Saham to Sanlam Group, a leading financial services group that provides comprehensive and tailored financial solutions to individual and institutional clients across all market segments.
Abraaj also sold the remainder of its shareholding to the Saham Group, a diversified Moroccan-based conglomerate operating in the insurance, offshoring and real estate sectors in the Middle East and Africa, and the parent company of Saham Finances.
The International Finance Corporation (IFC) and the IFC African Latin American and Caribbean Fund (ALAC) have also exited their shareholding alongside Abraaj.
Abraaj invested in Saham in 2012 through two of its Funds. The Company is a leading insurer in Africa with a presence in 26 countries, a network of over 650 branches with more than 3,000 staff, and a consolidated turnover of over US$ 1 billion.
The Company operates across three main sectors: insurance and reinsurance, assistance, and third party administration (TPA). It is the market leader for short-term insurance and life insurance across Africa and the pan-African leader in assistance through its partnership with Mondial Assistance. Saham has also leveraged its third-party administration services to optimize the management of health care costs through an extensive health care insurance network and a focus on providing beneficiaries with outstanding service quality.
Abraaj’s investment in Saham was predicated on changing demographics that were fuelling a greater demand for quality insurance care across both the corporate and consumer sector in its target markets. Moreover, at the time of investment, the insurance markets in the Middle East and Africa remained heavily underpenetrated with insurance penetration rates at approximately one third of the global average thereby providing a strong rationale to invest into the sector and take a lead position.
Saham was well positioned to capitalize on this market opportunity given the strength of its management team, its wide footprint across the Middle East and Africa, and its proven ability to successfully expand through organic and acquisitive growth.
Over the course of its investment, Abraaj enabled the Company to expand its regional footprint by facilitating strategic acquisitions in six countries in the Middle East and Central and East Africa, thereby supporting Saham to achieve its target of being present in over 20 countries in the region.
Abraaj and the Company’s management also worked together to establish greater institutionalization through improved corporate governance, enhanced financial reporting, and the establishment of a best in class MIS in order to manage the integration and development of systems across the Company’s subsidiaries.
Commenting on the announcement, Ahmed Badreldin, Partner and Regional Head for Middle East and North Africa at The Abraaj Group, said: “We have enjoyed a strong partnership with Saham Finances over the course of our investment and, together, helped grow the business into a leading insurance player providing diversified products and services to a growing client base. We believe the business is now well positioned to capture further market share across the continent and support the exciting new alliance between the Sanlam and Saham Group.”
Raymond Farhat, Managing Director of Saham Finances, added, “In partnership with Abraaj, IFC and the IFC ALAC Fund, Saham has been able to execute a number of initiatives that have positioned us for renewed growth and expansion. We take this opportunity to thank our partners for their close collaboration and support. Saham is now well poised to grow even faster and our new partnership with Sanlam is an important step to expand our mutual geographic presence to ensure a Pan-African footprint.”
Speaking on the exit, Mouayed Makhlouf, Director at the International Finance Corporation, added, “The IFC is pleased to support this transaction which promotes South-South investments and partnerships across Africa.”
IFC ALAC Fund Co-Head Colin Curvey said, “We are pleased with the partnership the IFC ALAC Fund has cultivated with Saham. We have supported an excellent business in a critical growth phase and we are confident it will continue to build on its strengths going forward.”
The transaction is subject to regulatory approvals and is expected to close in early 2016.
Photo Caption: Ahmed Badreldin, Partner and Regional Head for Middle East and North Africa at The Abraaj Group
About THE ABRAAJ GROUP
The Abraaj Group (“Abraaj” or the “Group”) is a leading private equity investor, purpose-built for operating in the growth markets of Africa, Asia, Latin America, the Middle East, and Turkey.
Employing over 300 people, Abraaj has over 25 offices spread across five regions with hubs in Dubai, Istanbul, Mexico City, Nairobi and Singapore. The Group currently manages c. US$ 9 billion across regional, sector and country-specific Funds.
Abraaj has realized c. US$ 5.4 billion from over 70 full and partial exits, and Funds managed by the Group have made over 140 investments across 10 sectors including consumer, energy, financials, healthcare and utilities. The Group is committed to the highest environmental, stakeholder engagement and corporate governance standards and is a signatory to the United Nations-backed Principles for Responsible Investment and the United Nations Global Compact. Abraaj’s founder, Arif Naqvi, was appointed to the United Nations Global Compact Board by UN Secretary-General Ban Ki-moon in 2012 and to the Interpol Foundation Board in 2014.