Canadian insurance coverage firm iA Monetary’s subsidiary, iA American, has signed a definitive settlement to amass Vericity in an all-cash deal price $170m (C$233.09m).
Backed by non-public funding agency JC Flowers & Co, Vericity specialises in offering direct-to-consumer life insurance coverage options.
iA stated it can fund the transaction utilizing its current money available and is anticipated to cut back its solvency ratio by almost three share factors.
In response to Vericity, the definitive settlement entails each issued and excellent share of the entire of 14,875,000 shares of Vericity’s frequent inventory to be transformed into the suitable to obtain $11.43 in money on the time of deal completion.
This per share merger represents a 101% premium to Vericity’s closing share value of $5.70 on final full buying and selling day on 2 October 2023.
The completion of Vericity’s acquisition is now topic to the receipt of mandatory regulatory approvals in Canada and the US.
The transaction is scheduled for completion by the primary half of 2024.
Vericity CEO James Hohmann stated: “We look ahead to accelerating our strategic development inside iA as we additional develop the eFinancial platform, the enterprise general, and create new alternatives for our folks and the franchise.”
Vericity’s monetary advisor for the transaction is Raymond James Monetary, whereas Skadden, Arps, Slate, Meagher & Flom is serving as authorized advisor to Vericity.
By means of the newest acquisition, iA goals so as to add an insurance coverage service and a digital company for servicing the mid-market life insurance coverage section.
iA Monetary Group govt vice-president, US Operations chief progress officer, Acquisitions co-head Mike Stickney stated: “With this acquisition, we’re including scale to our already well-established and profitable US particular person life insurance coverage enterprise and creating worth for our shareholders by constructing on our core insurance coverage and distribution competencies.”