International private equity firm, Cinven, today announces that the Sixth Cinven Fund has agreed to acquire the Viridium Group (‘Viridium’ or ‘the Group’), a leading life insurance consolidation platform in Germany, and to provide equity funding for Viridium to acquire Generali Lebensversicherung AG (‘Generali Leben’), a life insurer with c. 4 million policies and c. €40 billion of assets under management, in a transformational acquisition.

Headquartered in Neu-Isenburg, Viridium currently manages c. 1 million insurance policies and c. €15 billion of assets. Generali Leben is one of the Life subsidiaries of Generali Deutschland AG, the second largest German primary insurance Group, and is focused on traditional life guaranteed insurance products. The combination of Viridium and Generali Leben will create a clear leader in the German life insurance consolidation market, with c. 5 million policies and assets under management of c. €55 billion, and generate significant operational synergies.

Cinven’s Financial Services team believes the combination of Viridium and Generali Leben is an attractive investment for the Sixth Cinven Fund given:

• The German life insurance market remains highly fragmented with a significant number of acquisition opportunities for a leading consolidator such as Viridium;
• Viridium operates a well-invested and scalable administration platform, with IT infrastructure that has been specifically designed to administer the full spectrum of German life insurance policies;
• Generali Leben policyholders will benefit from the cost advantages of the Viridium model over the long-term, as a core part of the Viridium Group and from the comprehensive co-operation with Generali Deutschland;
• The combination of Viridium and Generali Leben will enable the realisation of material operational synergies due to their unique expertise and their successful investment in superior IT infrastructure, allowing for scale effects;
• Viridium will adopt all existing agreements and the c. 300 employees, currently already managing the closed book of Generali Leben, will become part of the Viridium Group;
• Viridium’s significant asset and risk management capabilities will benefit the Generali Leben policyholders by ensuring that the business remains robustly capitalised over time. The combined entity will also benefit from improved diversification at Group level; and
• These synergies, together with the full focus on best in class service makes combination a highly attractive platform for both policyholders and employees.

Generali Deutschland and Viridium will establish an innovative comprehensive partnership to serve the interests of customers and all stakeholders. Generali Deutschland AG will also retain a minority stake of 10.1% in Generali Leben and a Supervisory Board position and has an option to purchase a stake of up to 10% in Viridium at completion. Hannover Re, one of the largest reinsurance groups in the world, will reinvest as part of the transaction to maintain its stake in the combined Viridium and Generali Leben entity.

Caspar Berendsen, a Partner at Cinven, commented:

“We know Viridium and its management team extremely well, with our Financial Services and German teams having worked alongside them to successfully execute Viridium’s consolidation strategy over the past four years. The Group has acquired and integrated several sizeable life insurance businesses already, and now the acquisition of Generali Leben represents a transformational step-change for the business. In almost quadrupling its assets under management, the enlarged business will provide considerable further benefits for all stakeholders.”

Rory Neeson, a Partner at Cinven, added:

“Cinven has a long and proven track record of successfully investing in the life insurance consolidation sector in Europe through its investments in Guardian Financial Services, Viridium and Eurovita. This transaction represents an attractive opportunity for the Sixth Cinven Fund to create a clear leader in the German life insurance consolidation market. The combined Group will have a diversified portfolio of traditional guaranteed and unit-linked insurance policies and it will be the proven scale consolidator in its market with a unique integration track record. We expect the enlarged Viridium Group to continue to benefit from further M&A opportunities in future.”

Dr. Heinz-Peter Roß, Chief Executive of Viridium, added:

“We are delighted that Cinven is continuing to invest in Viridium, enabling us to acquire Generali Leben, as we continue to grow the business through the consolidation of life insurance businesses currently owned by other German insurers. We have demonstrated our ability to manage these businesses for the benefit of all stakeholders through our well-invested administration platform, as well as improving returns through more efficient asset management and implementing robust risk management.”

Completion of this transaction is subject to approval by the German Federal Financial Supervisory Authority (BaFin) and the respective anti-trust authorities.

International private equity firm, Cinven, today announces that the Fifth Cinven Fund has agreed to sell Viridium Group (‘Viridium’ or ‘the Group’), a leading consolidation platform for life insurance companies and portfolios in the German market for an undisclosed consideration.

The Fifth Cinven Fund acquired Viridium (formerly Heidelberger Leben Group) in March 2014 for an enterprise value of approximately €300 million. This transaction created the initial platform for Cinven’s strategy to consolidate the German life insurance market, building on its successful consolidation of the UK life insurance market through its investment in Guardian Financial Services.

At acquisition, Viridium had a portfolio of c. 600,000 policies and €5.2 billion of assets. Over the past four years, Cinven has actively supported the transformation of Viridium into the largest and most advanced life insurance consolidation platform in Germany:

• Cinven has worked closely with Viridium’s management team to consolidate the German market, acquiring Skandia’s Germany and Austria businesses from Old Mutual Group in October 2014 and subsequently acquiring the life insurance business of Protektor Lebensversicherungs-AG in July 2017, renamed to Entis. As a result of these acquisitions, Viridium now manages a combined total of c. 1 million insurance policies and c. €15 billion of assets;
• An advanced, modular and scalable IT platform has been developed and implemented in order to integrate large scale portfolio migrations; and
• The management team has been further strengthened with appointments of a new Chairman, CEO, COO, CIO and Chief Actuary to enable the Group to capitalise on, and subsequently integrate, market consolidation opportunities.

Cinven has a strong track record in the Financial Services sector, particularly in life insurance consolidation. In the UK, Cinven successfully realised its investment in Guardian Financial Services to Admin Re in 2016. In Italy, Cinven is currently executing a life insurance consolidation strategy through its investment in Eurovita, which was formed through the acquisitions and subsequent combination of ERGO Previdenza, Old Mutual Wealth Italy and Eurovita Assicurazioni.

In Germany, Cinven’s other current investments include STADA, the European manufacturer of prescription generics and over-the-counter pharmaceutical products; and Synlab, the European clinical laboratory services company. This transaction follows Cinven’s successful German realisations in the past 18 months including CeramTec, the global manufacturer of high performance ceramics (March 2018); HEG; the European provider of hosting and domain services to consumers and SMEs (April 2017); and SLV, the lighting manufacturer and distributor (January 2017).