The Arco Group Pension and Life Assurance Scheme is transferring its members and assets to the Clara Pension Trust.
The transaction will see 1,281 members and approximately £135m of assets transfer to Clara. The agreement has been reached alongside Arco Limited’s wider sale process.
“Our role and fundamental aim is protecting the long-term interests of our members and we have carefully considered the options available to the Scheme to achieve this. The sale of the business presented a unique opportunity to improve the security of members’ benefits overnight, whilst aligning with employer and shareholder objectives, and Clara’s innovative superfund was the perfect model through which to achieve this,” said Jo Harris, Senior Trustee Director at Dalriada.
“Reaching this agreement alongside the wider corporate transaction required a highly dynamic team effort between the Trustee, the Sponsor, Clara and advisers. We are delighted to have secured an outcome which puts members on a stronger footing for the future and wish the Arco team well under new ownership.”
“This transaction is a strong example of the role Clara can play when pension and corporate considerations need to be addressed together. The priority remains securing a better outcome for members, but doing so can also provide greater certainty for businesses as they pursue important strategic transactions. We were particularly pleased to be able to work with the Scheme and its advisers in an accelerated timeline to meet the demands of the sale process. Coming so soon after our announcement earlier in the month, it also reflects the growing range of circumstances in which trustees and sponsors are considering Clara as part of their endgame planning,” added Matt Wilmington, Chief Transactions Officer at Clara Pensions.
The trustee was advised by XPS as actuaries and investment consultant, Pinsent Masons as pension lawyer and EY as covenant adviser. Arco Limited was advised by KPMG as actuaries and strategic adviser, Squire Patton Boggs as pension lawyer and PWC as covenant adviser. Clara was advised by CMS Cameron Mckenna Nabarro Olswang and the Clara trustee was advised by Eversheds Sutherland.
“Any corporate transaction presents a number of challenges and complexities, but doing one in parallel with a transfer to Clara required significant intensity and dedication from all parties. Every adviser performed at an exceptional level, providing Arco and the Trustee with speedy and comprehensive advice, and it was a pleasure for the KPMG team to provide leadership and coordination. I should also say that Clara was fantastic, and showed a real desire to do the transaction, providing support, flexibility and sometimes necessary challenge, along the way,” said Iain Brown, Partner at KPMG.
