Decision to sell Starmount did not come easy to Baton Rouge family
The Sternberg family’s decision to sell its dental and vision benefits company—Starmount Life Insurance Co./AlwaysCare Benefits—to the publicly traded, Tennessee-based Unum didn’t come easy.
Since founding the company 33 years ago, the close-knit family has worked together to carefully grow its Baton Rouge-based company, which covers more than 940,000 people nationally and has annualized premiums of more than $180 million. Just one year ago, company founder and family patriarch Hans Sternberg officially passed the torch to his children, Erich Sternberg, who became CEO, and Deborah Sternberg, who took over as president. At the time, he said in a prepared statement, the next generation would lead Starmount Life/AlwaysCare into the next phase of growth.
In the wake of Monday’s announcement, Deborah Sternberg said that growth will best be achieved through the company’s acquisition by Unum, which ranks 279th on the Fortune 500 list. In 2015, it reported $10.7 billion in revenues and provided $6.8 billion in benefits.
Sternberg says it was never part of the family’s long-term goal to sell, but about six months ago they began shopping the company around in what she describes as a “very competitive process” to find a partner who can “take us to the next level and transform us from a strong regional company to a market-leading national player.”
Starmount, which is licensed in 49 states but is primarily concentrated in about dozen states in the southeast, could have done that through its own acquisition of smaller insurance companies, but Sternberg says that would have taken years.
Under the terms of the deal, Unum will acquire Starmount/AlwaysCare for $127 million. Starmount’s offices will remain in Baton Rouge, which will become the hub for Unum’s dental and vision benefits division. It is unclear whether Unum will retain the Starmount brand name for those services.
The company will, however, maintain the current management and leadership structure, with Erich and Deborah Sternberg staying on as CEO and president. Starmount’s 200 employees will also remain, and Unum is expected to eventually add workers to the Goodwood Boulevard offices as it expands product lines.
“They will add jobs and infrastructure to support the growth here,” she says.
Granted, there’s no guarantee in the long run that an out-of-state company will retain a Baton Rouge office and employees, even if it is the hub of a particular service line. But Sternberg says Unum has a track record of acquiring companies and keeping their local operations up and running, which is one reason her family agreed to the deal.
“If history is any indication they have purchased other companies and grown them where they are located so that is their philosophy,” she says. “Their philosophy is if it’s working, let’s invest more into it and help it continue to grow and that’s what we’re so excited about. They share our philosophy.”
The deal is expected to close by the end of the third quarter.