KKR (KKR) - Get Report on Wednesday said it will buy retirement and life insurance company Global Atlantic Financial Group, one of the biggest fixed-rate and fixed-indexed annuity providers in the country, for approximately $4 billion.
New York and Hamilton, Bermuda-based private-equity giant said it would pay Global Atlantic shareholders an amount equal to one-times book value as of the deal’s closing through a combination of cash, proceeds from potential minority co-investors and debt or equity.
Global Atlantic’s book value as of March 31 was about $4.4 billion. The deal is expected to close in early 2021. The private-equity firm said it expects to fund the acquisition with a combination of cash on hand, proceeds from potential minority co-investors and the issuance of new debt and/or equity.
KKR said the acquisition would expand its existing insurance businesses, which include managing $26 billion in assets on behalf of insurance companies. Global Atlantic has more than 2 million policyholders, the companies said in a joint statement.
The investment in Global Atlantic will be held on KKR’s balance sheet and through a proprietary vehicle established for others to invest alongside KKR’s balance sheet, not in any client funds, the company said.
Global Atlantic will continue to be run by its existing senior leadership team led by Allan Levine, Global Atlantic’s current chairman and CEO, once the deal is completed.
Shares of KKR were up 9.09% at $33.60 in trading on Wednesday.