IHC Announces Agreement to Sell a Controlling Interest in Pet Division and the Stock of Independence American Insurance Company

Rhea-AI Summary

Independence Holding Company (NYSE: IHC) announced an agreement to sell an 85% stake in its pet division, Pet Partners, Inc., as well as all stock of Independence American Insurance Company to Iguana Capital, Inc. The deal involves two separate agreements, with IHC receiving approximately $265 million in cash, equating to 70% of the total consideration, alongside 30% in the stock of the buyer. The transactions are subject to regulatory approvals and standard closing conditions.

Positive

• IHC to receive approximately $265 million in cash from the sale.
• Transaction expected to enhance IHC's financial position.

Negative

• Closure of agreements is contingent on regulatory approvals, which may delay the transaction.
• Sale of its pet division may impact future growth potential in that sector.

STAMFORD, Conn., May 17, 2021 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE: IHC) today reported its agreement to sell a controlling interest in its pet division and in the stock of Independence American Insurance Company (“Independence American”) to a subsidiary of Iguana Capital, Inc. (“Buyer”), an investment company specifically formed to facilitate this transaction. The transaction is structured as two agreements that are expected to close on different dates.       

IHC and its wholly owned subsidiary IHC SB Holdings LLC (“SBH”) have entered into a Stock Purchase Agreement (the “PPI Purchase Agreement”) with Buyer to sell its 85% interest in Pet Partners, Inc. (“PPI”). In addition, IHC and its wholly owned subsidiary, AMIC Holdings, Inc., have entered into a Stock Purchase Agreement (the “IAHC Purchase Agreement”) with Buyer to sell all of the stock of Independence American Holdings Company (“IAHC”), which owns all of the stock of Independence American. In aggregate for both deals, IHC will receive 70% of the consideration in cash, or approximately $265 million, and will receive 30% of the stock of Buyer.

The closing of the PPI Purchase Agreement is subject to customary closing conditions. The closing of the IAHC Purchase Agreement is subject to customary closing conditions including applicable regulatory approvals, one of which is the approval of the Delaware Insurance Department.

Raymond James & Associates acted as financial advisor to IHC and Dentons provided external legal counsel in connection with this transaction.

About Independence Holding Company

Through our subsidiaries, Independence Holding Company (NYSE: IHC) underwrites and distributes health, group disability and life, New York State DBL and paid family leave, and pet insurance. IHC underwrites policies in all 50 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands through our three carriers: Independence American Insurance Company, Standard Security Life Insurance Company of New York (Standard Security Life) and Madison National Life Insurance Company, Inc. We also distribute products nationally through multiple channels, including our agencies, call centers, advisors, direct and affinity relationships, Web Broker, and web properties, including www.healthedeals.com; www.healthinsurance.org; www.medicareresources.org; www.petplace.com; and www.mypetinsurance.com. As previously announced, IHC recently entered into a stock purchase agreement to sell all of the issued and outstanding capital stock of Standard Security Life. To learn more visit https://ihcgroup.com/.

Forward-looking Statements

Certain statements and information contained in this release may be considered “forward-looking statements,” such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements.  Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which IHC operates, new federal or state governmental regulation, IHC’s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in IHC’s other news releases and filings with the Securities and Exchange Commission. IHC expressly disclaims any duty to update its forward-looking statements unless required by applicable law.

CONTACT:  Loan Nisser

(203) 358-8000

www.IHCGroup.com

FAQ

What is Independence Holding Company's recent announcement regarding IHC?

Independence Holding Company announced an agreement to sell an 85% stake in its pet division and all stock of Independence American Insurance Company to Iguana Capital.

How much will IHC receive from the sale of its pet division?

IHC will receive approximately $265 million in cash, accounting for 70% of the total consideration.

What are the terms of the agreements for the stock sale?

The transactions are structured as two agreements, subject to customary closing conditions and regulatory approvals.

What is the expected outcome of IHC's sale to Iguana Capital?

The sale is expected to improve IHC's financial position by providing significant cash inflow.