Chesnara has signed its seventh Dutch acquisition with the purchase of Conservatrix, a closed life insurer with largely funeral plan policies placed into bankruptcy by the regulator in December 2020. On top of a nominal 1€ payment, Chesnara will inject £35m in cash, for an expected annual cash return of £4m for up to 20 years. No Own Funds has been given, but on an EcV basis, Chesnara expects a gain of £18m, a 3% group uplift to year-end 2021. Funding will be £21m from the group and £14m from local own funds. This deal is consistent with Chesnara’s M&A strategy, and will roughly double AuA in the closed Dutch unit, Waard, to £1bn, as well as doubling its divisional dividend paying capability to £8m, or just under a quarter of the group dividend. Pro-forma, the group solvency ratio will decline from 182% to 171%, consistent with the company’s target to return the ratio to 140-160% as January’s tier two debt proceeds are invested in acquisitions. Subject to regulatory approvals, the deal is expected to close by year-end 2022. Chesnara has outperformed the UK market and its UK life peers over the last year, which we think reflects the diversification and defensiveness of its cash generation, supported by an active M&A strategy that has not needed fresh equity since 2017, with close to £100m deployed over the past 12 months. After today’s deal, we would estimate a further £80m of tier two debt available to fund future M&A. In absolute terms however, the Chesnara share price has not done a great deal, and offers an attractive (and rising) 8.3% dividend yield. While likely to show some NAV volatility with market movements, continued M&A at a discount to Own Funds and EcV should continue to build value for the long-term. Note we have not updated forecasts for m-t-m movements since end-March, or for today’s deal, and would expect to do so with H1 results due end-August.