FGL is a leading provider of fixed indexed annuities and life insurance products
CF Corp. will acquire FGL for $31.10 per share in cash, or a total of approximately $1.84B, plus the assumption of $405M of existing debt
CF Corporation $CFCO and #Fidelity & Guaranty Life $FGL announced that their boards of directors have each unanimously approved a definitive merger agreement under which CF Corp. will acquire FGL for $31.10 per share in cash, or a total of approximately $1.84B, plus the assumption of $405M of existing debt.
The purchase consideration implies a value of 1.1x adjusted book value as of March 31, 2017.
The investor group, which includes the founders of CF Corp., Chinh Chu, and William Foley, II, funds affiliated with #Blackstone $BX , and Fidelity National Financial $FNF , will invest approximately $900M in common and preferred equity to fund the transaction.
FGL is a leading provider of fixed indexed annuities and life insurance products, with approximately $28B of GAAP Total Assets and approximately $1.6B of adjusted book value.
FGL has grown sales by approximately 10% annually from 2012 to 2016, supported by its long-standing relationships with distribution partners, changing U.S. retirement demographics, and an attractive product value proposition to policyholders. Following the close of the transaction, FGL will continue to be led by its current management team under Chris Littlefield as President and CEO. FGL will remain headquartered in Des Moines, Iowa, and will continue operations from Baltimore, Maryland, and Lincoln, Nebraska.
Messrs. Chu and Foley will serve as executive chairmen of the board, which will be composed of a majority of independent directors. In connection with the transaction, CF Corp. and HRG Group (HRG), FGL’s largest shareholder, have approved a purchase agreement under which CF Corp. will acquire certain reinsurance companies from HRG. The transaction is expected to close in Q4.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.