iA Financial Corporation is set to acquire Vericity in a significant all-cash transaction valued at approximately $170m.
The definitive merger agreement marks a strategic move by iA Financial to expand its presence in the U.S. insurance market.
Vericity, majority-owned by J.C. Flowers & Co., encompasses life insurance carrier Fidelity Life and life insurance distributor eFinancial within its portfolio.
Under the merger agreement, each issued and outstanding share of Vericity’s common stock, totaling 14,875,000 shares, will be converted into the right to receive $11.43 in cash upon the merger’s closing. iA Financial plans to fund this transaction using its existing cash reserves.
This per-share merger consideration represents a remarkable 101% premium to Vericity’s closing share price of $5.70 on October 2, 2023, the last full trading day before the acquisition was announced. Importantly, the transaction is not subject to any financing conditions or contingencies.
Vericity’s board of directors has unanimously approved this merger agreement, which is expected to conclude in the first half of 2024, pending customary closing conditions.
This acquisition positions iA Financial as a prominent player in the U.S. insurance landscape, strengthening its commitment to providing innovative insurance solutions and expanding its market footprint.
James Hohmann, Vericity’s CEO, said, “This is an exciting transaction that we believe offers compelling value for all of our stockholders and reflects the strength of our business. We look forward to accelerating our strategic advancement within iA as we further grow the eFinancial platform, the business overall, and create new opportunities for our people and the franchise.”
Eric Rahe, co-president of J.C. Flowers, said, “Over the course of our investment in Vericity, J.C. Flowers supported management in transforming the business model by combining AI and rich data analytics to deliver innovative proprietary technology to power all aspects of the business. We are gratified to see these efforts recognised by iA, one of the largest insurance and wealth management groups in Canada with a presence in the United States. We are confident that Vericity will continue to thrive as part of iA to the benefit of all of its stakeholders.”
Mike Stickney, EVP, chief growth officer US Operations, co-head of acquisitions, said, “With this acquisition, we are adding scale to our already well-established and successful U.S. individual life insurance business and creating value for our shareholders by building on our core insurance and distribution competencies. We look forward to working with Vericity to pursue further growth in the U.S. individual life insurance market with the addition of Fidelity Life, while diversifying and complementing our distribution capabilities with direct-to-consumer reach through the eFinancial digital agency.”
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