Midwest Holding Inc. Completes Acquisition by Antarctica Capital

Rhea-AI Summary

Midwest Holding Inc. (NASDAQ: MDWT) has been acquired by Antarctica Capital, marking a new chapter for the company. The acquisition was completed with Midwest shareholders receiving $27.00 in cash per share of common stock. Midwest will be integrated into Antarctica's retirement services business, leveraging their expertise and resources for further growth.

Insights

Financial Analyst

The acquisition of Midwest Holding Inc. by an affiliate of Antarctica Capital represents a strategic consolidation in the life and annuity sector. The transaction's immediate effect is the cessation of Midwest's trading on NASDAQ, following a cash payout of $27.00 per share to shareholders. This move is likely to have a positive liquidity event for current shareholders, while also potentially affecting the market dynamics within the insurance industry due to the reduced number of publicly traded competitors.

From a valuation perspective, the premium paid per share relative to the pre-announcement stock price and the industry average multiples can provide insights into the perceived value and growth potential of Midwest's insurance platform by Antarctica. This acquisition could signal confidence in Midwest's technology-driven approach and its annuity business segment, which may be seen as a growth driver within the mature insurance market.

Industry Analyst

The integration of Midwest into Antarctica Capital's portfolio is expected to leverage synergies, especially in the retirement services business. The emphasis on Midwest's innovative insurance platform suggests a focus on technology as a differentiator in the market. The insurance industry is increasingly adopting technology to improve efficiency, customer experience and risk assessment and Midwest's platform could be a key asset for Antarctica in this regard.

For stakeholders, the long-term benefits might include enhanced product offerings and service improvements due to the combined expertise and resources of both entities. However, potential drawbacks include integration risks and the possibility of cultural clashes that can affect company morale and customer satisfaction. Monitoring the post-acquisition integration process will be crucial in assessing the success of the transaction.

Legal Expert

The legal advisors' role in the transaction highlights the complexity of regulatory compliance in the insurance industry. The involvement of multiple legal and regulatory counsel firms, such as Fried, Frank, Harris, Shriver & Jacobson LLP and Kirkland & Ellis LLP, underscores the necessity of meticulous due diligence and adherence to insurance regulations. For the industry, this transaction may set precedents in terms of regulatory scrutiny and approval processes for similar future acquisitions.

It's also notable that the transaction included a fairness opinion, which is a common practice to ensure that the financial terms of the transaction are fair to the shareholders. This aspect of the deal could be of particular interest to investors and regulatory bodies, as it reflects the board's commitment to corporate governance and shareholder interests.

LINCOLN, Neb. and NEW YORK, Dec. 21, 2023 /PRNewswire/ -- Midwest Holding Inc. ("Midwest") (NASDAQ: MDWT), a technology-driven life and annuity platform, and Antarctica Capital ("Antarctica"), an alternative asset management firm, today announced the completion of the acquisition of Midwest by an affiliate of Antarctica.

Georgette Nicholas, Chief Executive Officer of Midwest, said, "Today marks the beginning of a new chapter for Midwest, and we are excited to work with the Antarctica team to fully capitalize on our market opportunity and drive future growth. This transaction was made possible by the outstanding contributions of our employees and partners, and we look forward to collaborating with Antarctica to grow and create further value for policyholders."

Chandra Patel, Managing Partner of Antarctica Capital, said, "Midwest's innovative insurance platform, including its fast-growing annuity business, has significant untapped potential, and we are very pleased to welcome the Midwest team into the Antarctica family of companies. Midwest will be a key component of our retirement services business. We are confident that our deep expertise, existing partnerships, and resources will accelerate Midwest's growth and further enhance its products and services." 

Midwest will continue to be led by its current leadership team and will maintain its name, personnel, headquarters in Lincoln, Nebraska, and operational hubs in New York and Vermont.

Pursuant to the terms of the transaction, Midwest shareholders are entitled to receive $27.00 in cash per share of common stock owned immediately prior to completion of the transaction. With the completion of the transaction, Midwest shares have ceased trading and will no longer be listed on the Nasdaq.

Advisors

RBC Capital Markets served as financial advisor to Midwest. Insurance Advisory Partners LLC rendered a fairness opinion to the Board of Directors in connection with the transaction. Fried, Frank, Harris, Shriver & Jacobson LLP served as transaction counsel and Lamson Dugan & Murray LLP and Primmer Piper Eggleston Cramer PC served as insurance regulatory counsel to Midwest. Kirkland & Ellis LLP acted as legal advisor to Antarctica on this transaction and Frohman Law Office LLC acted as regulatory counsel to Antarctica.

About Midwest Holding Inc.

Midwest Holding Inc. is a technology-enabled, services-oriented annuity platform. Midwest designs and develops in-demand annuity products that are distributed through independent distribution channels to a large and growing demographic of U.S. retirees. Midwest originates, manages, and typically transfers these annuities through reinsurance arrangements to asset managers and other third-party investors. Midwest also provides the operational and regulatory infrastructure and expertise to enable asset managers and third-party investors to form and manage their own reinsurance capital vehicles. For more information, please visit www.midwestholding.com.

About Antarctica Capital

Antarctica Capital is an alternative asset management firm headquartered in New York with assets under management of approximately $1.5 billion as of December 31, 2022. Antarctica Capital is a registered investment advisor and is dedicated to investments in private markets and real assets and the establishment of long-term capital vehicles to leverage this investment focus. Antarctica Capital's investment approach is active ownership with an inherent focus on sustainability and providing more than capital to develop companies. The firm has an absolute return focus, which leads the firm to rigorously evaluate and build conviction around idiosyncratic investment opportunities and build value through the implementation of its investment strategies, such as SIGA^®, SARO^® and SEREY™. For more information visit https://antarcticacapital.com/.

Contacts

Midwest Holding

Investors: ir@midwestholding.com
Media: press@midwestholding.com or Paul Caminiti / Nicholas Leasure, Reevemark, 212-433-4600

Antarctica Capital

Media: info@antarcticacapital.com

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SOURCE Midwest Holding Inc.

FAQ

What is the ticker symbol for Midwest Holding Inc.?

The ticker symbol for Midwest Holding Inc. is MDWT.

What was the acquisition price per share for Midwest shareholders?

Midwest shareholders received $27.00 in cash per share of common stock.

Who acquired Midwest Holding Inc.?

Antarctica Capital, an alternative asset management firm, acquired Midwest Holding Inc.

Where is Midwest Holding Inc. headquartered?

Midwest Holding Inc. is headquartered in Lincoln, Nebraska.

What happens to Midwest's shares after the acquisition?

With the completion of the transaction, Midwest shares have ceased trading and will no longer be listed on the Nasdaq.