iA Financial Group Completes $170 million Acquisition of Vericity

Rhea-AI Summary

iA Financial Group has completed the acquisition of Vericity for $170 million in an all-cash deal. Vericity stockholders will receive $11.43 per share. The agreement, formalized on October 3, 2023, involves iA American Holdings, a subsidiary of iA Financial acquiring all outstanding common stock of Vericity. CEO James Hohmann highlighted the strategic benefits, including expanded capabilities for Fidelity Life and eFinancial, aimed at making life insurance more accessible. Vericity was previously majority-owned by J.C. Flowers & Co. Following the acquisition, Vericity's shares have ceased trading on NASDAQ. Raymond James Financial served as the financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor for the transaction.

Positive

• iA Financial Group completed a $170 million acquisition of Vericity.
• Vericity stockholders receive $11.43 per share.
• The acquisition could enhance the capabilities of Fidelity Life and eFinancial.

Negative

• Vericity's common stock has ceased trading on NASDAQ.

Insights

Financial Analyst

The acquisition of Vericity by iA Financial Group for $170 million is a significant development, particularly for stakeholders in both companies. The purchase price of $11.43 per share represents a premium over Vericity's recent trading prices, which typically has positive implications for Vericity's shareholders.

Short-Term Implications: iA's acquisition of Vericity, a company specializing in life insurance products through its subsidiaries Fidelity Life and eFinancial, provides immediate benefits through expanded market reach. The all-cash nature of the transaction ensures liquidity for Vericity's shareholders.

Long-Term Implications: For iA, this acquisition is a strategic move to enhance its footprint in the U.S. life insurance market, potentially leading to cross-selling opportunities and increased market share. However, integrating Vericity's operations will require time and resources, which can temporarily impact operational efficiency.

Industry Context: The life insurance industry is experiencing transformations driven by digital innovation and evolving consumer preferences. This acquisition aligns with industry trends of consolidation to leverage technological advancements and broaden product offerings.

Market Research Analyst

Competitive Landscape: The acquisition of Vericity by iA Financial places iA in a stronger competitive position within the U.S. life insurance market. Vericity’s digital platforms, particularly eFinancial, offer significant potential for iA to enhance its distribution and customer engagement strategies. These platforms can provide iA with valuable data analytics and customer insights, improving product offerings and customer experience.

Strategic Fit: Vericity's focus on making life insurance accessible complements iA's existing product portfolio and aligns with iA's strategic objective of expanding its presence in North America. This strategic fit could give iA a competitive edge in reaching underserved markets.

Challenges: The integration process may pose challenges, including aligning corporate cultures, integrating IT systems and retaining key talent. Efficient management of these aspects will be important for realizing the full potential of this acquisition.

Vericity Stockholders to Receive $11.43 per Share in Cash

CHICAGO--(BUSINESS WIRE)-- Vericity, Inc. (“Vericity”) (NASDAQ: VERY) announced today that iA American Holdings, Inc., a subsidiary of iA Financial Corporation, Inc. (collectively, “iA”) (TSE: IAG) has completed its acquisition of Vericity in an all-cash transaction valued at approximately $170 million. Under the terms of the definitive merger agreement that was entered into by the parties on October 3, 2023, iA acquired all of the issued and outstanding common stock of Vericity at a price of $11.43 per share.

James Hohmann, Vericity’s Chief Executive Officer, said, “This milestone marks the start of a new chapter for Vericity and we are proud to join the iA family. Combining our teams and resources unlocks exciting new opportunities to extend the capabilities of Fidelity Life and eFinancial to make life insurance more accessible and affordable for everyday Americans. We also see abundant possibilities ahead for our employees who will play a pivotal role in charting and achieving our future growth potential.”

Previously, Vericity was majority owned by J.C. Flowers & Co. (“J.C. Flowers”), a leading private investment firm dedicated to investing globally in the financial services industry.

As a result of the completion of the transaction, Vericity’s common stock has ceased trading and Vericity is no longer listed on the Nasdaq Capital Market.

Raymond James Financial, Inc. served as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Vericity on this transaction.

About Vericity

Vericity, Inc., through its subsidiaries, Fidelity Life Association and eFinancial, LLC, is a leader in direct-to-consumer life insurance solutions. As an innovator in product design and distribution, the company makes life insurance affordable and accessible for middle market consumers. With national call centers, digitally enabled sales and underwriting processes, quick policy issuance, and an emphasis on products not medically underwritten at the time of sale, it is easier for customers to get the coverage they need at a price they can afford. Visit https://www.vericity.com/ to learn more.

About iA Financial Group

iA Financial Group is one of the largest insurance and wealth management groups in Canada, with operations in the United States. Founded in 1892, it is an important Canadian public company and is listed on the Toronto Stock Exchange under the ticker symbols IAG (common shares) and IAF (preferred shares). For more information, visit https://ia.ca/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240627041505/en/

John Buchanan, General Counsel

Vericity, Inc.

John.Buchanan@FidelityLife.com

Source: Vericity, Inc.

FAQ

What is the value of the acquisition of Vericity by iA Financial Group?

The acquisition is valued at $170 million.

What will Vericity stockholders receive per share in the acquisition?

Vericity stockholders will receive $11.43 per share in cash.

When was the merger agreement between iA Financial Group and Vericity finalized?

The merger agreement was finalized on October 3, 2023.

What immediate impact did the acquisition have on Vericity's stock?

Vericity's common stock has ceased trading on NASDAQ.

Who served as financial and legal advisors for Vericity in the acquisition?

Raymond James Financial served as the financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP acted as the legal advisor for Vericity.