US-based private equity giant, Blackstone, will take a more than 48 per cent in NZ life insurer, Partners Life, via the issue of about 64.5 million “liquidation preference shares”, official documents show.
The terms of the deal put Blackstone, via two subsidiary firms – Immortality Pte and Immortality ESC Ltd – first in line of all Partners Life equity-holders following an ‘exit event’ to recover its initial $200 million investment plus “an amount equal to a return of 5% per annum” on the issue price, the Companies Office filing shows.
However, Blackstone’s ‘liquidation preference shares’ would revert to ordinary equity if Partners Life lists, according to the document.
In the agreement announced this May, Blackstone agreed to shell out $200 million of new capital for Partners Life as it sought to grow market share and product variety in the competitive NZ life insurance sector.
While Blackstone’s exact holding was not disclosed at the time, the Companies Office filing shows Partners Life will issue just over 64.5 million shares to add to the existing pool of about 68.8 million shares taking the US private equity firm’s overall ownership to about 48 per cent.
The agreement with Blackstone also includes an “anti dilution” clause to protect the group’s relative holdings in the event Partners Life issues further ordinary shares.
Based on the Blackstone injection, Partners Life would be valued at over $400 million. In the year to March 31, 2015 the NZ life insurer founded by Naomi Ballantyne reported $112.7 million in net revenue and a profit of $18.5 million.
At the time of the Blackstone agreement Ballantyne said in a note that the “key benefits” of the deal included:
- Medium term capital requirements fully satisfied
- Additional growth opportunities – both immediate and future – can be explored
- Financial strength underpinned
- Brand awareness increased
- Business connections and influence can be leveraged
- Flexibility around IPO timing to maximise outcome
She told press in May: “We intend to go for a public listing when market conditions are right, and the support of Blackstone up to and throughout a future listing process will allow the company to solidify its market leading position in New Zealand.”