Nichola Saminather

TORONTO, Reuters – Sun Life Financial (NYSE ) has announced that it will purchase DentaQuest in America for $2.48billion. It is the biggest acquisition in over two decades and makes Sun Life Financial Canada’s latest Canadian insurer to pursue growth beyond its own market.

Executives at Canada’s 2nd-largest insurer of life said that the deal to purchase America’s number two provider of dental care, which has more than 33 million members worldwide, will bring about an additional $100 million to their U.S. income for its first full year after it closes.

Sun Life announced this deal on Sunday evening.

According to a spokesperson, it is the largest acquisition since Sun Life purchased Clarica Life Insurance for C$7.3 million ($5.8 billion in 2002).

Sun Life shares rose 1.7% in Toronto morning trading to C$66.20, against a 0.4% drop in the stock benchmark.

Canaccord Genuity Analyst Scott Chan indicated that after analyzing synergies of $60 million, the firm will be expected to earn 24 Canadian cents more per share in underlying earnings and 50 basis point to its return-on-equity. The transaction “should support Sun Life’s peer-leading ROE metrics.”

It follows an extensive list of recent acquisitions by Canadian life insurers, which, despite experiencing limited growth in Canada and having record amounts of capital, have pursued deals in foreign countries, including the United States.

Great-West Lifeco agreed to the purchase of Prudential Financial Inc (NYSE:), the full-service retirement company, in July.

Sun Life itself has been expanding in the U.S. group benefits business, albeit with smaller deals, including that of U.S. medical intelligence and health-care navigation provider PinnacleCare and benefits platform Maxwell Health https://www.prnewswire.com/news-releases/sun-life-financial-acquires-maxwell-health-300659355.html.

The company had indicated an interest in growing its group benefits, stop-loss and business to protect against unpredicted losses.

Sun Life will have the ability to move forward and invest further, as the company seeks to increase its pharmacy stop loss business and also to benefit from potential funding expansions and improvements in health care in the U.S. executives spoke on the conference call.

Sun Life will have transactional and integration costs in excess of $250 Million, executives announced.

($1 = 1.2562 Canadian dollars)