FG Financial Group, Inc. (FG Financial) and FG Group Holdings Inc. have officially signed a definitive plan of merger, aiming to merge in an all-stock transaction.
The combined entity, to be renamed Fundamental Global Inc., will continue trading on the Nasdaq under tickers “FGF” for common stock and “FGFPP” for Series A cumulative preferred stock.
With assets totaling over $110 million and an annual revenue surpassing $65 million, the merger aims to enhance public company scale and capital efficiency.
Anticipated expense savings are projected to exceed $3 million in the first year post-merger, with additional savings targeted in the subsequent 12-24 months.
Kyle Cerminara, Chairman of the Board of FG Financial and FG Group Holdings, will assume the role of CEO in the combined company.
Cerminara emphasises the goal of focusing on highly scalable and high Return on Invested Capital (ROIC) businesses while simplifying the organisational structure.
Larry Swets, CEO of FG Financial, sees the merger as a strategic step, allowing combined teams to concentrate on growing reinsurance and merchant banking businesses.
Mark Roberson, CEO of FG Group Holdings, anticipates the merger will create an organisation with greater scale and resources.
The plan of merger received unanimous approval from independent board members of both companies and majority stockholder approval from FG Financial. The transaction is expected to close in early 2024, subject to customary closing conditions and approval by FG Group Holdings’ stockholders.
As per the proposed merger details, FG Group Holdings common stockholders will receive one share of FG Financial common stock for each share held.
Post-closing, legacy stockholders of FG Group Holdings will own 72% of Fundamental Global Inc. common stock, with legacy FG Financial common stockholders owning the remaining 28%.
The business post-combination will include entities like FG Reinsurance, Ltd. (FGRe), Strong Global Entertainment Inc. (Strong), and activities in merchant banking, SPACs, and asset management.
The governance structure of the combined company will include a seven-member Board of Directors with Kyle Cerminara as Chairman. Leadership roles for various segments will be filled by industry experts to drive the long-term value of Fundamental Global Inc.
