Shareholders in the pay-per-mile auto insurer, Metromile Inc. have given their approval to the impending acquisition of the company by insurtech Lemonade.
At a Special Meeting of Metromile stockholders held today, approval was given to a proposal to adopt the merger agreement entered into with Lemonade, Inc., which is aiming to acquire Metromile in an all-stock transaction.
Metromile said that the merger proposal was supported by at least 95.9% of the votes cast at the meeting, which represents roughly 63.6% of the shares of Metromile’s common stock issued and outstanding, as of the close of business on December 28, 2021.
The proposed transaction with Lemonade remains subject to regulatory approvals and the satisfaction of other customary closing conditions, but Metromile hopes its acquisition will be completed during the second calendar quarter of 2022.
As we explained when this deal was announced, the valuation under the acquisition proposal from Lemonade was significantly lower than the valuation of Metromile mooted in its previous SPAC deal that took the insurer public.
At one stage Metromile had a valuation of more than USD 2 billion based on the fully diluted share count, right after the listing in early February 2021.
Lemonade then agreed to acquire the San Francisco-based insurer for a fully diluted equity value of approximately USD 500 million, which represented a significant decline in the equity value of Metromile.
Right now, Metromile’s market cap is given as around $225 million and that’s after a roughly 5% increase in share price today, presumably a response to this announcement.
Gaining shareholder approval is important for Metromile, to secure its future as part of Lemonade.
It’s clear sufficient of its shareholder base believe that is the best route forwards for the insurtech, whose share price has declined more than 90% in one year.
It’s perhaps possible that those shareholders see no other option now, as the future for Metromile as a stand-alone company could be very uncertain if this acquisition by Lemonade failed to complete.