Alpha Growth to acquire Barbados-based Havelet Assignment Company

LONDON, UK: Alpha Growth plc (LSE: ALGW), a leading financial services specialist in the growing life insurance and longevity asset class, has signed a share purchase agreement to acquire Havelet Assignment Company Limited, a Barbados based financial services company specialising in settlement assignments.

This is a strategic acquisition which not only expands Alpha’s abilities to accumulate assets under administration but also provides a complementary source of business to Alpha’s Providence Life Assurance Company.

Alpha Growth Plc expects to complete the acquisition by 30 November 2022 and will make additional announcements in due course once completed.

The acquisition of Havelet Assignment Company is not subject to regulatory approval and there are no conditions to completion other than the satisfaction of conditions customary for a transaction of this nature.

The terms of the acquisition included the payment to the seller of a nominal sum for the outstanding shares of Havelet and 10% of the net fees generated for a limited time period, by the assets under administration.

Havelet currently administers ~$9 million in assigned settlements and generates net profit margins of ~52%. The company is cash flow positive. No shares were issued by Alpha for the acquisition.

Havelet, established in 2012, provides solutions to claimants and attorneys who are awarded settlements through litigation to defer receipt of their settlement on a pre-tax basis. As the settlement obligation is invested on a pre-tax basis and grows on a tax-deferred basis, there is a much larger capital base than if the settlement were received directly by the claimant, taxed, and then invested.

The net result is the potential for a higher after-tax sum to be received by the claimant. Havelet is not subject to withholding tax on dividends pursuant to Barbados-US taxation arrangements.

Havelet’s clients, established over the past ten years, can customise deferral and payment terms; receive lump sum distributions; and select beneficiaries through annuities purchased and managed by Havelet, typically ranging from 10 to 20 years depending upon the age of the claimant and the settlement type.

These annuities will be capable of being issued by Providence, thereby increasing the cross-selling opportunities across the Alpha group of companies. The annuities aim to provide a long-term independent stream of revenue for both Havelet and Providence.

Going forward, Alpha Growth Plc plans to increase the marketing of Havelet’s solutions to its established clientele and broader legal community in the US with a view to materially increasing the assets under administration.

Alpha’s Non-Executive Director Jason Sutherland stated: “I have been in the annuity sector for over 20 years and very familiar with the settlement assignment business. It’s a consistently growing field given the amount of civil litigation in the US and awarding of large claims.

Havelet Assignment Company is an ideal acquisition for Alpha as it will generate service fees on its own level and opens a channel for Providence to issue annuities and grow its fee-based assets under administration.”

Gobind Sahney, Alpha’s Executive Chairman added: “Havelet is a small but important acquisition for Alpha Growth and one which provides significant additional opportunities to grow AUM within both Havelet and Providence. As part of our build and buy strategy, we continue to actively progress our acquisition pipeline and will update shareholders on progress when appropriate.”