KKR & Co. revealed on Wednesday, Nov. 29, that it will acquire the remaining stake in Global Atlantic Financial Group for $2.7 billion. The sum is the price for the 37% stake and will be paid in all cash.
Since 2021, KKR private equity firm has been managing Global Atlantic’s investment portfolio. The insurance company’s assets under KKR’s management reportedly increased from $72 billion to $158 billion in 2020. Then, in July of 2020, it announced its plan to acquire the insurance provider company, as per Reuters.
Terms of the Deal
The new acquisition deal between KKR and Global Atlantic for the remaining 37% stake is expected to be completed in the first quarter of 2024 and is still subject to customary closing conditions. Under the terms of the deal, it was agreed that the PEF firm would pay the latter’s minority shareholders an amount in cash that is equal to the insurance firm’s book value, with few specific adjustments.
“We are taking this step because we have demonstrated, over the last three years, that we are stronger together,” Global Atlantic’s chief executive officer, Allan Levine, said in a press release. “Being part of KKR has strengthened our position as a leading insurance company and enhanced our ability to deliver compelling solutions for our clients. Moving from a diverse group of shareholders to a single one with KKR clarifies our objectives and allows us to think and invest longer term.”
The CEO further shared their aim for the new deal by stating to “unlock further value by taking this step in our capital structure, neither our client-first approach nor our investment and risk management framework will change, and the day-to-day experience of our clients and colleagues will feel very much the same as it does today.”
Other Details of the Transaction
Simpson Thacher & Bartlett LLP serves as KKR’s legal advisor for the transaction, while Global Atlantic has hired Debevoise & Plimpton LLP. The total cash purchase may reach about $2.7 billion. Finally, KKR will source the payment from its balance sheet, which, as of September 2023, has $23 billion worth of cash and investments.
Photo by: KKR & Co. Press Release
