Mutual Capital Group to Acquire ICC Holdings, Inc. for $23.50 Per Share in $73.8 Million Transaction
Mutual Capital Group (MCG) has announced its acquisition of ICC Holdings (ICCH) for $23.50 per share, totaling approximately $73.8 million. This all-cash deal, which represents a 48% premium to ICCH's average stock price over the last 30 days and a 42% premium to its 52-week high, was unanimously approved by both boards. The transaction values ICCH at 1.07 times its book value as of March 31, 2024, and is expected to close in Q4 2024, pending customary approvals. Post-acquisition, ICCH will continue operating independently under MCG. Key ICCH shareholders, including directors and officers holding 25% of shares and Tuscarora Wayne Insurance Company with 6.4%, support the deal. Griffin Financial Group and Janney Montgomery Scott provided financial advisories, with Locke Lord LLP and Stevens & Lee, P.C. as legal counsels.
- The acquisition price of $23.50 per share offers a 48% premium over ICCH's volume-weighted average stock price of the last 30 days.
- The transaction represents a 42% premium over ICCH's 52-week high closing price.
- The total equity value of the transaction amounts to $73.8 million, providing substantial value to ICCH shareholders.
- ICCH will operate as an independent subsidiary under MCG, potentially offering more strategic support.
- Key shareholders, including directors and officers controlling 25% of ICCH shares, support the transaction, indicating confidence in the deal.
- The transaction has been unanimously approved by both companies' boards of directors.
- The transaction is subject to customary closing conditions, including shareholder and regulatory approval, which introduces potential delays or uncertainties.
- The acquisition price represents a multiple of only 1.07 times ICCH’s book value, which may be considered low by some investors seeking higher multiples.
Insights
The acquisition of ICC Holdings, Inc. (ICCH) by Mutual Capital Group, Inc. (MCG) at $23.50 per share represents a 48% premium to ICCH's volume-weighted average stock price over the last 30 days and a 42% premium to ICCH's 52-week high closing price. This substantial premium can be seen as a way to ensure shareholder approval for the transaction and demonstrates MCG's confidence in ICCH's future prospects. The deal valuation at $73.8 million or 1.07 times ICCH’s book value at March 31, 2024, implies that MCG sees intrinsic value and potential growth in ICCH’s business that justifies this price.
Short-term, ICCH shareholders stand to gain immediate liquidity and value realization from this all-cash transaction. Long-term, ICCH operating as an independent subsidiary provides stability and continuity, with the added benefit of increased support from MCG, which could potentially translate to synergies and operational efficiencies down the line.
However, investors should be aware of the customary closing conditions, including shareholder and regulatory approvals, which introduce closing risk. The unanimous board approval and significant insider support (31.4% of ICCH common stock) mitigate some of this risk, but it remains a point to monitor.
Given the premium and alignment of management and major shareholders, this acquisition appears financially beneficial to ICCH’s shareholders.
The structure of this acquisition involves numerous legal considerations. Most notably, the deal includes customary closing conditions such as shareholder and regulatory approvals. Shareholder approval is somewhat derisked by the fact that directors and executive officers of ICCH holding 25% of the stock intend to vote in favor of the transaction. Additionally, a subsidiary of MCH holding 6.4% of ICCH’s common stock also intends to vote in favor.
Regulatory approval remains a factor outside the control of the companies and though such approvals are typically obtained, they can introduce delays or complications, especially in consolidations within tightly regulated industries like insurance. The independent opinions from Griffin Financial Group and Stonybrook Capital, alongside fairness opinions from Janney Montgomery Scott and Feldman Financial Advisors, reinforce the legitimacy and perceived fairness of the transaction, providing additional comfort to shareholders regarding the valuation and terms.
ICCH will continue to operate independently post-acquisition, which can reduce antitrust concerns and facilitate a more straightforward approval process. However, investors should still keep an eye on any developments in this area, as regulatory environments can change.
- All-cash transaction provides significant premium, delivering substantial and certain value to shareholders of ICC Holdings, Inc.
- ICC Holdings, Inc. and its subsidiaries will continue to operate as an independent entity with increased support from Mutual Capital Group.
The transaction, which was unanimously approved by both boards of directors, represents a total equity value of approximately
The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions, including approval by ICCH shareholders and receipt of regulatory approvals. ICCH will continue to operate as an independent subsidiary of MCG after closing. Directors and executive officers of ICCH, who control, in the aggregate,
Griffin Financial Group, LLC is serving as a financial advisor to MCH and MCG, and Mutual Capital Investment Fund, LP, CIBC Bank,
Stonybrook Capital, LLC is serving as financial advisor, Feldman Financial Advisors, Inc. offered a fairness opinion, and Stevens & Lee, P.C. is serving as legal advisor to ICCH.
About Mutual Capital Holdings, Inc. and Mutual Capital Group
Mutual Capital Group, based in
About ICC Holdings, Inc.
ICC Holdings, Inc., based in
Forward Looking Statements
This release contains disclosures, which may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "may," "will," "expect," "project," "estimate," "anticipate," "plan," "believe," "potential," "should" or the negative versions of those words or other comparable words. Forward-looking statements do not relate solely to historical or current facts, rather they are based on management's expectations as well as certain assumptions and estimates made by, and information available to, management at the time. These statements are not guarantees of future performance. These forward-looking statements are based upon current expectations and are subject to a number of uncertainties and risks that could significantly affect current plans, anticipated actions and future financial condition and results.
Various forward-looking statements in this release relate to the acquisition by MCH of ICCH. Important transaction-related and other risk factors that may cause these forward-looking statements to differ include: (i) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (ii) the completion of the transaction on anticipated terms and timing, and the satisfaction of conditions to the completion of the transaction; (iii) significant transaction costs associated with the transaction; (iv) litigation relating to the transaction, including the effects of any outcomes related thereto; (v) the risk that disruptions from the transaction will harm ICCH’s business, including current plans and operations; (vi) the ability of ICCH to retain and hire key personnel; and (vii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction.
Additional risks and uncertainties are discussed in ICCH’s filings with the Securities and Exchange Commission (the “SEC”), including, but not limited to, those identified in its Annual Report on Form 10-K for the year-ended December 31, 2023 and subsequent filings with the SEC. All forward-looking statements speak only as of the date they are made and are based on information available at that time. MCH and ICCH do not undertake any obligation to update or revise any forward-looking statements to reflect subsequent circumstances or events.
Important Additional Information and Where to Find It
This release is being issued in connection with the proposed acquisition of ICCH by MCH. In connection with the transaction, ICCH intends to file the proxy statement and certain other documents regarding the transaction with the SEC. The definitive version of the proxy statement (if and when available) will be mailed to ICCH’s shareholders. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, and is not a substitute for the proxy statement or any other document that ICCH may file with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain, free of charge, copies of the proxy statement (when it is available) and other documents that are filed or will be filed with the SEC by ICCH through the website maintained by the SEC at www.sec.gov and at ICCH’s investor relations website at https://ir.iccholdingsinc.com.
Participants in the Solicitation
ICCH and certain of its directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies from ICCH’s shareholders in connection with the transaction.
Information regarding the names of the Company’s directors and executive officers and their respective direct or indirect interests in the Company by security holdings or otherwise and other information relating to the participants is set forth in the Company’s definitive proxy statement for the Company’s 2024 annual meeting of shareholders, filed with the SEC on May 1, 2024 (the “2024 Proxy Statement”) and available at https://www.sec.gov/Archives/edgar/data/1681903/000143774924014092/icch20240426_defc14a.htm. Please refer to the sections captioned “Share Ownership of Certain Beneficial Owners,” “Proposal One: Election of Directors,” “Director Compensation,” “Executive Compensation Practices,” “Executive Compensation,” “Executive Management,” and “Certain Relationships and Related Transactions” and Appendix B in the 2024 Proxy Statement. You may obtain free copies of these documents using the sources indicated above.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240607010643/en/
Mutual Capital Group, Inc.
Reiner R. Mauer, President & Chief Executive Officer
570-746-9520
rmauer@mutualcapitalgrp.com
ICC Holdings, Inc.
Arron K. Sutherland, President & Chief Executive Officer
309-732-0105
arrons@ilcasco.com
Source: ICC Holdings, Inc.
FAQ
What is the acquisition price per share for ICCH by Mutual Capital Group?
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What premium does the acquisition price represent over ICCH's average stock price?
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Will ICCH continue to operate independently after the acquisition?
Did the boards of directors approve the ICCH acquisition by MCG?
What percentage of ICCH shares do directors and executive officers control?
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