iA Financial to acquire Vericity
Vericity has entered into a definitive merger agreement whereby iA American Holdings, a subsidiary of iA Financial Corporation, will acquire Vericity in an all-cash transaction valued at approximately $170 million. Vericity is majority owned by J.C. Flowers & Co. and its subsidiaries include life insurance carrier Fidelity Life and life insurance distributor eFinancial.
For the years ended December 31, 2022 and 2021, Vericity had total consolidated revenue of $163.9 million and $176.6 million, net life premium revenue of $100.1 million and $108.0 million, and a net loss of $20.5 million and $16.7 million, respectively.
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 closing of the merger, funded by iA with existing cash on hand. The 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. The transaction is not subject to any financing condition or contingency.
Vericity’s board of directors unanimously approved the merger agreement. The merger is expected to close in the first half of 2024. It is subject to certain customary closing conditions.
“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.” – James Hohmann, Vericity’s CEO.
“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.” – Eric Rahe, co-president of J.C. Flowers.
“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.” – Mike Stickney, EVP, chief growth officer US Operations, co-head of acquisitions.