Sithega, a black-owned and managed investment holding company, has purchased a 62% stake in Legal Expenses Group Africa (Lega) for an undisclosed sum.
The deal means Sithega will join Hollard, SA’s largest privately owned insurer that holds the remaining 38% in Lega, which was founded in 1984 and ultimately owns nonlife insurers LegalWise, Scorpion Legal Protection and Family Insurance via subsidiary Legal Expenses Insurance Southern Africa (Leza). The Lega group collected more than R850m in gross premium income for the year to end-June 2022 and has about 1,000 employees across SA, Botswana and Namibia.
The acquisition follows two-and-a-half years of negotiations between the three parties and forms part of plans by Hollard and the secretive Enthoven family, a forebear of which started the independent insurer in the 1950s, to encourage greater black participation in SA’s financial services sector. The deal remains subject to various conditions, including receiving regulatory approvals from the Prudential Authority (PA) and the Competition Commission.
“Hollard’s partnership with Sithega forms part of our strategy to enable increased participation of black entrepreneurs as owners in the financial services sector,” said Hollard CEO Willie Lategan.
Yellowwoods Capital, an investment vehicle run by Adrian Enthoven, is an anchor investor in Sithega along with Stellar Capital. Sithega, which focuses on asset management and insurance, was co-founded by African Bank chair Thabo Dloti and Khaya Ntozini, the former MD of Old Mutual’s mass and foundation cluster.
“The journey we have walked with the Lega team in concluding this transaction has affirmed our belief that end-to-end, simple-to-use insurance solutions make a difference,” said Sithega MD and co-founder Thabo Dloti. “We hope to make a real difference in the lives of average South Africans looking for real solutions beyond just another legal or funeral product.”
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