British insurer Legal & General Group has entered into an agreement to purchase 75% share capital of Cofunds Holdings, in a deal valued at approximately 131m in cash.
The acquisition, which will be financed form the existing cash resources of the acquirer, will boost Legal & General's scale and distribution capabilities in the investment platform market.
It will further boost its assets under administration (AUA), forecasted to be double by 2017. The acquisition values Cofunds at 175m and is subject to regulatory approval.
Legal & General savings CEO Mark Gregory said, "As we said at our preliminary results, digital solutions is one of our five drivers of growth."
"Cofunds, alongside our existing platform IPS, provides us with the scale and capability to be a major player in this important and growing market."
Following the completion of the transaction that is expected to complete during the first half of 2013, Cofunds and Investor Portfolio Service (IPS) will set up a new business entity within the savings division.
Retaining its separate brand in the UK investment platform market, the acquired entity will continue serving both retail and institutional clients with its competitive charging structure.
Cofunds is the UK's largest investment platform for financial services and has over 50bn of AUA as of 28 February 2013, and a share of 22% of the UK investment platform market.
Headquartered in London and trading in the US, France, the Netherlands, Egypt, India and the Gulf, Legal & General Group provides individual protection, group protection, annuities, bulk purchase annuities (BPAs) or pension buyouts and general insurance (GI) among others.
