US private investment firm Bain Capital is set to acquire Liverpool Victoria Financial Services Limited (LV=) for just over half a billion pounds.

LV=, which is one of Dorset’s biggest employers, announced it had reached an agreement on the terms of a transaction today, December 15.

Bain Capital will pay £530m to acquire LV=’s savings & retirement and protection businesses.

Under the proposal LV=’s With-profits business will be ring-fenced in a separate fund and closed to new business.

The capital available for distribution is expected to increase by up to 40 per cent as a result of the transaction and will be used to increase payments to With-profits members as their policies mature.

Their long-term interests will continue to be protected by an experienced With-profits committee.

The acquisition is subject to regulatory approval and approval from LV= members.

It is expected to complete by the end of 2021, subject to the conclusion of the legal process.

Alan Cook, Chairman of LV=, pictured left, said: “As a newly standalone life and pensions business in an increasingly competitive market, the Board recognised that LV= required significant long-term investment to be sustainable.

“This transaction is the culmination of an extremely thorough and robust strategic review – followed by a structured sale process to secure the best long-term future for our members, employees, other stakeholders and the business.

“The Board is delighted to have secured an attractive price and unanimously agreed that the transaction with Bain Capital presents an excellent financial outcome for all our members, as well as offering an unrivalled commitment to LV=’s future prospects, business and people.

“We look forward to engaging fully with our members in advance of a member vote in the first half of 2021.”

Mark Hartigan, CEO of LV=, pictured right, said: “The partnership with Bain Capital recognises the opportunity to further invest to develop LV= at a time when it is well positioned, growing market share, expanding its products and trading resiliently, despite the pandemic.

“While our corporate structure will change, our culture and values remain the same.

“The Board is excited by the opportunities it creates for our people, partners and customers – enabling the LV= brand and business to further develop as a major force in the UK life insurance market.”

Matt Popoli, Global Head of Insurance, Bain Capital Credit, commented: “We are delighted by the opportunity to provide long-term support to LV=’s Board of directors and management team on this transaction, which delivers certainty and value to LV=’s members.

“We are investing in a unique company with an impressive management team and employee base, that is already well positioned in the market, with a clearly established product set, strong IFA relationships and a reputation for customer excellence.

“We have been impressed by LV=’s initiatives to further improve its market position, the benefits of which are already emerging.

“Our principles and values are in direct alignment with those of LV= and we firmly believe in a shared vision for the future of the business.

“We look forward to working collaboratively to achieve these shared goals, which include delivering profitable growth, while preserving LV=’s strong financial position, independence and rich heritage dating back to 1843.”

As a result of the transaction all members are expected to benefit from a cash payment to compensate for loss of mutual membership upon full completion of the transaction.

The transaction will be carried out in two stages with Bain Capital initially acquiring LV=’s subsidiary LVLC together with the administration and new business infrastructure.

All eligible members will be invited to vote on the transaction at a Special General Meeting which is expected to be scheduled for the first half of 2021.

The mutual life pensions and investments group employs about 2,500 people in Dorset.

It made a £15m pre-tax profit  from continuing operations in its last financial year (2019) compared with a loss of £90m in the previous year.

Founded in 1984, Bain Capital is one of the world’s leading private multi-asset alternative investment firms with approximately $105 billion in assets under management.

The US-based company was founded in Boston, Massachusetts.

LV= has a base at County Gates in Bournemouth.

Allianz UK took full control of the general insurance arm of LV= from January 1.

The German insurer already had a 49 per cent stake before officially acquiring the remaining 51 per cent.

The £1.1bn purchase of Liverpool Victoria General Insurance Group Ltd (LiV=GI) was first announced in 2017.

It was run as a joint venture before Allianz took full control.