NU Online News Service, July 10, 11:33 a.m. – Protective Life Corp., Birmingham, Ala., has agreed to sell its dental benefits division to Fortis Inc., New York, for $300 million in cash.
Fortis Inc., the U.S. arm of Fortis, a large Belgian and Dutch financial services company, hopes to complete the deal by Dec. 31 and fold the newly acquired operation into Fortis Benefits, Kansas City, Mo., a subsidiary that sells group employee benefits.
Completing the deal would expand the Fortis Benefits sales organization by 50%, and make Fortis the leader in the U.S. market for employee-paid dental benefits, Fortis says.
Fortis estimates the deal will also make Fortis Benefits the fourth-largest U.S. provider of all types of dental benefits.
Drayton Nabers Jr., chairman of Protective Life, says his company is selling its dental division so that it can focus on its core life insurance, retirement savings and credit businesses, and free up about $200 million in capital. “As opportunities arise, we intend to invest this capital in our other businesses at rates of return in line with those currently being achieved,” Nabers says.
The Protective Life dental division reported $32.3 million in pretax operating income for 2000 on $315 million in premium revenue, compared with $39.6 million in pretax operating income for 1999 on $313 million in premium revenue.
The unit accounted for about one-fifth of its parent company’s revenue.