Vericity, Inc. has entered into a definitive merger agreement with iA American Holdings, Inc., a subsidiary of iA Financial Corporation, Inc., to be acquired in an all-cash transaction valued at approximately $170 million.
Vericity is majority-owned by J.C. Flowers & Co., a private investment firm, who is selling its stake in the firm to the life insurance specialist.
The transaction is not subject to any financing condition or contingency, with Vericity’s board of directors unanimously approving the agreement, expected to close in the first half of 2024.
J.C. Flowers and iA Financial are big investors in the insurance and reinsurance sector.
James Hohmann, Vericity’s Chief Executive Officer, commented, “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.”
As part of the agreement, each issued and outstanding share of the total 14,875,000 shares of Vericity common stock will be converted into the right to receive $11.43 in cash at the closing of the merger, funded by iA with existing cash on hand.
Per-share merger consideration represents a 101% premium to Vericity’s closing share price of $5.70 on October 2, 2023, the last full trading day prior to the announcement of the transaction.
Eric Rahe, Co-President of J.C. Flowers, added, “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 recognized 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.”
The deal is subject to certain customary closing conditions for a transaction of this type, which includes expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and receipt of insurance regulatory approvals.
