Cinven merges Viridum with Generali Lebensversicherung

The transaction is an exit for Fifth Cinven Fund, which held a final close on €5.3bn in 2013 and reported a net IRR of 21.34% as of December 2017.

It is the 11th investment from the Sixth Cinven Fund, which held a final close on €7bn in June 2016 and was 21% drawn across seven investments as of December 2017.

The transaction will create the largest group in the German life insurance market with five million policies and assets under management (AUM) of €55bn.

Generali Leben is a subsidiary of Generali Deutschland, which will retain a 10.1% stake in the business and has the option to purchase a 10% stake in Viridium at completion. The two groups said they will also establish a strategic partnership to serve the interests of customers and stakeholders.

Hannover Re will also reinvest in the transaction to maintain the stake it acquired in Cinven's original buyout.

Cinven stated that Generali Leben policyholders would benefit from the cost advantages of the Viridium model. It also said the merger will realise operational synergies due to the two companies' unique expertise.

Unquote recently reported on the trend of PE firms seeking out larger bolt-ons and mergers relative to the size of the original portfolio company in order to deploy their growing reserves of dry power. 

Previous funding
Cinven acquired Viridium (then Heidelberger Leben Group) in 2014 for an enterprise value of €300m. It was then used as a platform for the consolidation of the German life insurance market with the aim of replicating the strategy of Guardian Financial Services, which consolidated the UK life insurance market with Cinven's support and was acquired by Admin RE for £1.6bn in 2015.

Viridium acquired Skandia's Germany and Austria businesses from Old Mutual Group in October 2014, and bolted on Protektor Lebensversicherungs in July 2017. In total, the group's AUM increased from €5.2bn to €15bn during Cinven's holding period.

Company
Viridium is a life insurance group based in Neu-Isenburg. It manages one million policies and has approximately €15bn in AUM.

Generali Leben is a life insurance group based in Munich. The company was founded in 1845 and manages four million policies, and has AUM of €40bn.

People
Cinven – Caspar Berendsen, Rory Neeson (partners).
Viridium Group – Heinz-Peter Roß (CEO).

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