Enterprise Group, a Ghanaian insurance company has substituted Sanlam, its South African partner, with US-based Leapfrong Financial, in a transaction that will see its capitalisation rise more than six-fold, and make possible its African expansion dream a reality.
The new partnership comes after Enterprise and Sanlam Group agreed, on mutual grounds, to part ways after twelve years, since they could not agree on strategic matters.
In an interaction with section of the media last Wednesday, June 28, 2017 Chief Executive Officer (CEO) of Enterprise Group, Keli Gadzekpo said: “Leapfrog is in partnership with Prudential Financial of the USA. Prudential is one of these global mega players in insurance but they have come together and they have approached us and Leapfrog has taken the lead to make investment to take over the role of Sanlam in Enterprise.”
According to the CEO, “although Sanlam, which had a 49 percent stake in Enterprise Group, had similar African expansion plans, it was not inclined to do it with its Ghanaian counterpart, which necessitated the break away”.
Mr. Gadzekpo added; “that really sets the stage for saying: okay, it’s time for us to go to the next level but we have this difficulty with our partner; so, we initiated discussions and fortunately we had very good discussions. We agreed with each other and 18 months after, here we are; we have found common grounds and everybody is actually quite pleased,”
The partnership with Leapfrog, according to Mr. Keli Gadzekpo will strengthen the Enterprise’s unique claims payment and delivery system, with a platform which serves as a digital broker and logistics manager between U. S. and African insurance consumers.
He explained that though Sanlam had 49% stake in Enterprise Group, which included General and Life Insurance, Pensions and Properties, the new partners will have a lesser stake as the Enterprise Group will now increase its stake to almost 60%.
The CEO noted that in the case of life outline business, Sanlam had 49% and Enterprise had 51%, but after this transaction, Enterprise Group will increase its stake in the life business to 59%, almost 60, because we have that much confidence in our business.
“In the case of the general business it was 60%/40%, but it will become 75% for us and 25% for our new partners. In the case of our Pensions business it also used to be 60%/40%, but it will become 80% for Enterprise and 20% for our partners and then also our Properties business used to be a 100 percent wholly owned subsidiary of the group. We are inviting our new partners to participate in that, so that will be 70%/30%. So, apart from properties, all of them, we increase our stake in our operating companies,” he said.
Mr. Gadzekpo assured that no staff of the group will be retrenched due to the coming of the new partners as the majority shareholders of the group are firmly in charge and rather have increased their stake in the group.
“No one will lose his job under the new arrangement. In the first instance, think of this transaction as not replacing the engine of your car, or not changing the colour of the car; they are not dealing with the passengers in the back seat. It’s merely a replacement of say a story of growth or growing or scaling up; so, if anything at all, we are going to be looking to attract more numbers, more talents, more capacity, not witling down on what we have. It’s not even part of the narrative.”
He further assured the staff that: “They need to be going to sleep dreaming of how they are going to do more and be bigger.”
According to the CEO, the price that Leapfrog and Prudential are paying moves the valuation of Enterprise from a market capitalisation on the Ghana Stock Exchange of less than $40 million to a potential valuation of $250 million.
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