The price of the MBO was not disclosed.
The deal is understood to have been in the works since the beginning of the year, as the executive management team of RL360° sought to be free to fulfil its ambitions of expanding into new international markets, which was not as much of a priority for its UK- and Ireland-focused parent.
It has already received regulatory approval and is therefore now deemed to be complete.
The news of the MBO comes a day after the UK Sky News organisation reported that Royal London had agreed to sell RL360° , its Isle of Man-based life insurance products operation, to Vitruvian.
In a statement this afternoon, Royal London Group said it was “confident that the transfer of ownership will enable RL360° to achieve its strategic vision through a further acceleration of the growth that RL360° has experienced in recent years”.
The RL360° executive management team, led by chief executive David Kneeshaw, will remain unchanged, the statement added.
Following completion of the deal, the company will be re-branded simply RL360°.
With respect to the financing of the deal, Royal London said the new company would obtain “additional support” from the global reinsurance group Munich Re, as well as an element of long-term financing from its soon-to-be-former parent, and a capital injection from Vitruvian. No jobs were expected to be lost as a result of the MBO.
Excitement on the Isle of Man
Kneeshaw said the entire management team at RL360° was “extremely excited” that Royal London had agreed to the buyout, and that it was now official.
“We have built a strong business since we merged in 2009, with clear strategic direction, a compelling product range, and a service-driven team on the Isle of Man and around the world to support our customers and distributors,” Kneeshaw added.
“We believe this transaction is the first of its type in the offshore life space, and it allows us to follow a long-term plan with the capital stability we require to continue to expand our business internationally and enhance our platform-linked approach with the UK.
“We remain fully committed to our existing products, markets, partners and customers. Once the transaction is completed we will move swiftly to realise RL360°’s existing growth plans.”
Stephen Byrne, partner at Vitruvian, said his company was “delighted to be backing such a strong management team, with considerable assets under administration already, but also a great growth strategy. This is exactly the sort of investment we look for, a scalable services business addressing a global market opportunity.”
SPILA to RL360
The entity that is Royal London 360°, and soon to be just RL360°, has had a complicated history. It had its origins in Scottish Provident International, an insurer owned by Resolution when it was acquired by a closed-book life company called Pearl. At that point, in 2008, Scottish Provident, or Scottish Provident International Life Assurance (SPILA) as it was formally known, was acquired by Royal London, which combined it with its Scottish Life International arm, in 2009, and the combined company was given the then-new RL360° branding.
Today RL360° manages funds in excess of £2bn.
Phil Loney, chief executive of the Royal London Group, today revealed that his company had been approached “on several occasions with proposals for the purchase of RL360°” over the years, but that none of these were capable of being realised.
By selling off the RL360° operation, he added, RLG will now be able to “focus on the development of our core businesses in the UK and Ireland.”
Natalie Hall, marketing director of RL360°, said the mood among the company’s employees on the Isle of Man was ebullient.
“I can’t believe this day has finally arrived,” she added.