Barloworld UK Pension Scheme completed a £484 million ($557 million) full buy-in with Just Group, the insurer said in a news release Wednesday.
The deal involved a new partner reinsuring 50% of the liabilities, the news release said. It is Just Group's largest defined benefit transaction to date in terms of value and participants numbers, with 4,800 participants.
Barloworld is an industrial processing, distribution, and services company with headquarters in Sandton, South Africa.
"Our target has been to remove U.K. pension scheme risk by fully insuring all members, and this transaction comes at the right time with favorable terms," said Quinton McGeer, CEO of Barloworld UK, in the release. "We were prepared to make a significant financial contribution to enable this deal to happen, subject to obtaining attractive pricing and terms, in order to secure a full buy-in that meets both our corporate objectives but also protects the benefits of the scheme members."
The trustee of the U.K. pension fund is chaired by Independent Trustee Services. The lead transaction adviser was U.K. consultant Lane Clark & Peacock, while Isio Group served as pension fund actuary and investment adviser to the trustee. Legal advice was provided to Just Group by CMS and to the trustee by Pension Partners and Macfarlanes, the release said.
LCP partner Imogen Cothay described the process as "intensely competitive," with Just Group agreeing to a price-lock mechanism to mitigate risks, Ms. Cothay said in the release.
