AfricInvest acquires minority stake in Royal Exchange General

AfricInvest, a leading Pan-African asset management company with over 180 investments in more than 25 countries across the African continent has acquired a minority stake in Nigeria’s Royal Exchange General Insurance Company (REGIC), in a transaction valued at N3.6 billion.

The investment, made through AfricInvest evergreen private equity fund, FIVE, in the form of a subscription to a capital increase, in addition with reserve puts REGIC’s capital base above N10 billion threshold required from players in its category.

Benjamin Agili, managing director/CEO, REGIC who announced the acquisition on Wednesday said the desire to participate in more large-ticket corporate transactions, diversify existing business and product lines, as well as diversification of delivery channels, were some of the key drivers behind this push for additional working capital by REGIC.

Ajili said the additional working capital will also enable the company to expand its underwriting capacity in key business areas such as the retail mass market, agricultural insurance and insurtech, which is the future of insurance.

“This new investment, which has already been approved by NAICOM, will, in addition to supporting the enhancement of REGIC’s underwriting capacities, strengthen the company’s execution capabilities at top and middle management in order to ensure the successful implementation of an ambitious growth plan for the company within the next 5-7 years.”

REGIC, which is one of Nigeria’s biggest private insurance companies, was established in 2008, following the restructuring of the then Royal Exchange Assurance Nigeria (REAN) which had been in operation for over a century in Nigeria.

FIVE has joined the shareholding of REGIC alongside the Royal Exchange Group and Blue Orchard’s InsuResilience Investment Fund (IIF), which had earlier invested in the Company in July 2019.

The investment by AfricInvest (FIVE Fund) will also result in the restructuring of the Board composition of REGIC, with the expected appointment of new Directors to the Board of REGIC, pending approval by the regulator, NAICOM.

These new Directors are expected to bring their wealth of experience and expertise in their various fields into play and chart a new strategic direction for REGIC, as the company seeks to be among the Top 3 general insurance companies in Nigeria within the next 5 years.

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Speaking on the new investment by AfricInvest, Kenneth Ezenwani Odogwu, chairman of Royal Exchange Group added, “Being the first insurance company in Nigeria and having been in business for over 100 years, I am excited and hopeful that we will be just as prominent for the next 100 years. The investment by AfricInvest and Blue Orchard is an important inflection point on this journey. Under the auspices of a new board led by a seasoned professional like Ike Chioke (awaiting NAICOM approval), I am confident that we will continue to provide relevant services and products to a new generation of insurance customers”.

Mehdi Gharbi, senior partner at AfricInvest and Co-head of FIVE, commented, “REGIC represents a perfect fit with the investment strategy of FIVE as it combines return and impact. REGIC’s expansion plan will allow the Company to achieve sustainable and strong growth, facilitating access to insurance while creating value for stakeholders. I’m excited to join the REGIC’s board and to contribute alongside my colleagues the emergence of a new champion in the Nigerian insurance market.”

Ernesto Costa, head of Private Equity Investments at BlueOrchard and representative of IIF in the board of REGIC added, “One of the key drivers behind our decision to invest in REGIC in 2019 was the history of the company, as well as the commitment of the key shareholders and management team to chart a new strategic direction for the company towards retail and improving the resilience of small-scale farmers, SMEs and households against the effects of climate change. We are happy with the addition of AfricInvest, a like-minded and experienced investor, as a strategic shareholder and together, we will offer the necessary expertise, leadership and direction from the Board to ensure REGIC continues on its growth trajectory. “

Sylma du Plessis, partner at Alkebulan and advisor to the Royal Exchange Group commented, “This transaction is testament to REGIC’s strong management and opportunity set that it could successfully attract investors of the caliber of FIVE. We are proud to have played a part in securing funding for and giving financial advice to the Royal Exchange Group.”

For this transaction, Royal Exchange General Insurance Company had Messers Alkebulan and Co as its Financial Advisers while the Firm of Sefton Fross were the Legal Advisers. FIVE’s Legal Adviser was Udo Udoma, Bello Osagie (UUBO) and Co., while Royal Exchange Plc’s Legal Adviser was Punuka International Law Centre.

AfricInvest is among the leading private equity firms in Africa with over 1.9 billion USD of funds raised. Founded 27 years ago, AfricInvest has made over 180 investments in more than 25 countries across the African continent in a variety of sectors, contributing to significant socio-economic development mainly thanks to revenue growth and profitability improvement across its portfolio companies.

Royal Exchange General Insurance Company Limited (REGIC) comes from a pedigree that is more than a century old. It is licensed by the National Insurance Commission to offer the full range of general and special risks insurance products. With decades of experience in the Nigerian market, REGIC has an enviable reputation for technical competence and financial strength.