SUN LIFE FINANCIAL $44.38 (Toronto symbol SLF; Shares outstanding: 610.6 million; Market cap: $27.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.4%; www.sunlife.ca) continues to expand in the U.S. At the same time, it’s cutting its risk by focusing on highly profitable niche markets with low capital reserve requirements.
In June 2015, the company bought U.S. asset manager Prime Advisors for an undisclosed amount. Prime has about $13 billion under management, mainly bond portfolios for U.S. insurance firms.
In September 2015, Sun Life paid $560 million for Bentall Kennedy Group, which manages $27 billion in real estate for over 550 institutional clients across the U.S. and Canada.
Now the company has acquired Assurant Inc.’s U.S. employee benefits unit for $975 million U.S.
This latest deal nearly doubles the size of Sun Life’s U.S. benefit business, to $4.0 billion of policies for over 64,000 employees of small, medium and large businesses. It’s now the sixth-largest U.S. benefits provider by revenue, up from ninth.
The acquisition also adds leading dental- and vision-insurance products to Sun Life’s lineup, letting it cross-sell them to its existing clients. As well, Assurant has invested heavily in an advanced online enrollment and customer-service system that Sun Life can extend to its entire benefits business.
Sun Life is a buy.
