Chattanooga’s Unum buying dental, vision benefits company for $127 million

April 04--In Unum's second purchase of a dental insurer in less than a year, the Chattanooga company has agreed to buy a Louisiana-based dental and vision benefits business for $127 million, plus net assets.

Unum is acquiring H&J Capital LLC, the parent of Starmount Life Insurance Co. and AlwaysCare Benefits of Baton Rouge, La., as the locally based company expands its portfolio of workplace financial protection products.

Unum President and CEO Rick McKenney said Monday the transaction is "a perfect fit for both our Unum US and Colonial Life businesses as we expand our customer relationships in pursuit of our growth objectives."

Starmount has more than 220 employees and in-force annualized premiums of more than $180 million. It covers in excess of 940,000 people, according to Unum.

McKenney said in a statement to employees that plans are to begin selling Starmount products as soon as the deal is closed and stagger a national rollout over 2017 and 2018.

Unum said it sees the potential to grow premiums to about $500 million in five years.

Starmount will remain headquartered in Baton Rouge and its leadership team of CEO Erich Sternberg and President Deborah Sternberg will remain.

Last summer, Unum acquired National Dental Plan, which provides dental insurance through the workplace in the United Kingdom, for about $49.5 million.

"Unum shares our company values of providing exceptional service, innovative products and thoughtful solutions for our customers," said Starmount CEO Erich Sternberg.

Subject to regulatory approvals and customary closing conditions, the transaction is expected to close by the end of the third quarter. The acquisition will be funded from holding company cash and some incremental debt, according to Unum.

"We see strong demand for dental and vision insurance, and the Starmount business will help us expand access to these benefits at the workplace," said Unum US President Mike Simonds.

Unum, which reported 2015 revenues of $10.7 billion and provided $6.8 billion in benefits, said the Starmount deal won't alter the insurer's earnings or capital management outlook for 2016.

Also, the company said the transaction won't change its share repurchase program. The acquisition is expected to be "neutral to accretive" to earnings per share in 2017, according to Unum.

Contact Mike Pare at [email protected] or 423-757-6318.

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This story was updated April 4 at 10:50 p.m. with more information.

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