Lombard, Leapfrog buy RSA's stake in Thai insurer

The two private equity firms purchased RSA's entire holding of 4.35 million shares at THB435 apiece, according to a regulatory filing. They now each own a 10.875% stake in SMK. RSA, which is divesting assets in order to comply with capital requirements imposed by UK regulators, expects to generate a gain of approximately GBP22 million ($34.4 million) on the sale.

SMK's stock closed up 1.28% on December 19 at THB476.

Founded in 1951, SMK is a fully-licensed general insurer. In 1999 it became the first specialized motor insurance provider to list on the Stock Exchange of Thailand. It is the country's second-largest automobile insurers and also offers health, personal accident, fire and marine insurance products.

The company is headquartered in Bangkok and has a nationwide network of approximately 160 branches and sales outlets, and 6,000 agents. The Thai motor automobile insurance market is said to have grown at an average annual rate of 18% between 2009 and 2012.

"So much of good business is about the people; SMK is staffed with a performance focused management team responsible for creating an exceptional business. The team is in an ideal strategic position to capture rapid growth from the emerging consumer segment while delivering financial inclusion at scale," said Stewart Langdon, partner and co-head of Asia at LeapFrog, in a statement.

SMK reported revenue of THB8.78 billion for 2013, up from THB7.64 billion the previous year. Net profit increased from THB627.1 million to THB869.9 million over the same period. For the first three months of 2014, revenue and net profit were THB7.13 billion and THB728.7 million, respectively.

Lombard specializes in growth-oriented investments in companies formed and operated in Southeast Asia. The PE firm closed its fourth Asia fund in September 2013 at the hard cap for institutional commitments of $350 million after 18 months in the market. LPs include the International Finance Corporation (IFC), which agreed to contribute $25 million.

LeapFrog focuses on financial services investments in the emerging markets of Asia and Africa. The firm, which has backers such as George Soros and J.P. Morgan, reached a $400 million close on its second fund in September 2014. It is also popular among development finance institutions, with CDC Group, DEG, the European Investment Bank and FMO all participating.

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• Topics
• Southeast Asia
• Financials
• PIPEs
• Thailand
• LeapFrog Investments
• Lombard Investments
• Southeast Asia
• Financial Services
• PIPE