Willis Group Holdings Limited, said today it has completed a leveraged transaction with the original family shareholders of Gras Savoye & Cie, the leading French insurance broker, and Astorg Partners, a private equity fund, to reorganize the capital of Gras Savoye.
With the closing of the transaction, Willis, the family shareholders of Gras Savoye, and Astorg each now own equal stakes of 31.8 percent in the new holding company and have equal representation of 33.3 percent of the voting rights on its Board. The remaining 4.5 percent is held by a large pool of Gras Savoye managers.
Gras Savoye has been an Associate company of Willis since 1997 when Willis acquired a 33 percent ownership interest. Willis had gradually increased its shareholding to 48.6 percent of voting rights (46.2 percent of outstanding shares), with family shareholders and management owning the remainder.
The leveraged transaction valued Willis’ investment in Gras Savoye at approximately $335 million. Willis rolled over approximately $132 million in equity and convertible debt and lent approximately $47 million to the new holding company at a rate of 6 percent per annum. As a result, Willis received approximately $156 million of tax-free net cash proceeds from the transaction, which it will use to pay down existing debt.
Willis has the option to purchase 100 percent of the capital in the new holding company in 2015, should it choose to do so, with notification in 2014. An existing put option, which gave family shareholders an option to sell their shares in Gras Savoye to Willis between now and 2011, has been cancelled.
Financial information in this press release has been translated between Euros and US Dollars at a rate of exchange of $1 = €0.687, the closing euro rate on December 15, 2009. Additional information relating to the transaction can be found in Willis’ 8-K filed on November 18, 2009.
