Acquisition of Radix Pension Managers Limited

The transaction is an acquisition by MBO Capital Management Limited (Acquirer or MBO) of 4,900,520,000 ordinary shares of Radix Pension Managers Limited (Target or Radix) being 80% of the share capital of Radix (the Proposed Transaction). 

The Target is licensed by the National Pension Commission (PenCom) to carry on business as a pension fund administrator in accordance with the Pension Reform Act 2014. In February 2017, Radix received approval from the National Pension Commission to acquire majority stake in IGI Pension Fund Managers, a company previously owned by IGI Plc, now known as Radix Pension Managers Limited. The principal activities of the Target include the administration and management of pension fund and assets. Radix offers various pension products & services, including, Retirement Savings Account, Voluntary Contribution, Retiree Account, Approved Existing Scheme, Micro Pension, Radix Mobile App.

The Acquirer, on the other hand, is a Private Equity Fund Manager with three main business areas namely; principal investments, private equity funds and advisory business.

The strategic and economic rationale for the transaction is that it presents the parties with the opportunity to combine synergies and position Radix to become one of the leading Pension Fund Administrators in Nigeria. There is a substantial gap in the Contributory Pension Scheme (CPS) market in Nigeria. According to the National Pension Commission (PenCom) Q4 2021 report, only 25 of Nigerias 37 states (36 + FCT) have enacted the CPS into law. Of these 25, only 10 states (Anambra, Benue, Delta, Edo, Ekiti, FCT, Kaduna, Lagos, Ondo and Osun) have commenced employer and employee remittances. This indicates a clear opportunity for growth in the public sector with the state government being the largest employer in many states. Also, only about 16% of the entire working population of Nigeria have been captured in one form or the other under the CPS. This creates a large opportunity especially in the Micro Pension Plan (MPP) segment.

Post-acquisition, MBO will embark on a sensitisation campaign to encourage more people to key into the CPS and the MPP. MBO expects to achieve this by leveraging on its relationship with various MSMEs and self-employed individuals. Additional avenue for growth also exists in the Current Investments Legacy pension fund market. This has been Radixs highest growing segment and it will continue to leverage on its relationships to secure more legacy funds and help the sponsors secure superior returns.