It isn’t the kind of blockbuster deal Great-West Lifeco Inc. is known for in Canada, but its recent acquisition of a Las Vegas-based health-care services company is meaningful nonetheless.

The Winnipeg-based insurance giant has entered into a binding agreement to acquire all the outstanding shares of Mediversal Inc. The newest addition to the Great-West family administers claims for employers with self-funded group health and workers’ compensation plans. It has 65,000 members, most located in the Las Vegas area.

“It’s a significant deal; it adds 65,000 lives,” says Ray McFeetors, Great-West Life president and CEO. “It allows us to leverage some of the medical provider network we have down there, and we hope to sell some stop-loss insurance into it.”

Management of Mediversal will stay on once the transaction has closed, which is expected to occur in the third quarter, the company says.

McFeetors says it is no secret that Great-West is looking for acquisitions, particularly in the U.S. and Europe, where it is a niche player.

“Clearly, the U.S. is a big market. We’d like to expand [further] down there. There are lots of opportunities in Europe, as well,” he says.

Great-West Life’s strategy in the U.S. and Britain is different than in Canada. Instead of buying entire companies, Great-West and its subsidiaries are looking to cherry-pick niche businesses. In the U.S., its focus is on Great-West Life & Annuity Insurance Co. ’s two core areas, health care and defined contribution pensions.

The Canadian division is still the biggest of Great-West Life’s arms, contributing $398 million of its profit for the first six months of the year, followed by the U.S. ($294 million) and Europe ($202 million).

Bill McCallum, president and CEO of Denver-based GWL&A, says the firm already has a “very strong” medical cost position in Las Vegas.

“We see opportunity both in pharmacy and third-party vendors to generate incremental revenue. Our projection would be that it would be as profitable as the upper end of mid-market cases,” he says.

McFeetors notes Great-West Life is no longer the largest insurer in the country, but it’s now one of Canada’s biggest firms of any kind. “We have $26 billion in market cap. A couple of banks are bigger. We will continue to grow,” he says.

Great-West Life is best known for its two major domestic acquisitions — the $2.9-billion deal for London Life Group in 1997 and the $7.3-billion purchase of Canada Life
Assurance Co. in early 2003.

Mediversal is the second acquisition made by Great-West Life in the past three months.

In May, its British subsidiary, Canada Life Ltd. , acquired the payout annuity business of
Phoenix and London Assurance Ltd., a unit of the Resolution Life Group in Britain. IE