J.C. Flowers Completes Sale of Vericity for Approximately $170 Million

Rhea-AI Summary

J.C. Flowers, a global private investment firm, has completed the sale of Vericity to iA American Holdings for approximately $170 million. The transaction was finalized under a merger agreement from October 3, 2023, with iA acquiring all issued and outstanding common stock of Vericity at $11.43 per share. Vericity, known for its direct-to-consumer life insurance solutions, has been transformed under J.C. Flowers' ownership, leveraging AI and data analytics. This sale marks a significant milestone for both Vericity and J.C. Flowers, positioning Vericity for future growth under iA's ownership.

Positive

• Vericity sold for approximately $170 million in an all-cash transaction.
• Shareholders receive $11.43 per share.
• Transformation of Vericity under J.C. Flowers' ownership using innovative technology like AI and data analytics.
• Vericity is positioned for continued growth under iA's ownership.

Negative

• None.

Insights

Financial Analyst

J.C. Flowers' sale of Vericity for $170 million to iA American Holdings represents a significant development in the financial services landscape. This transaction offers insights into various facets:

From a financial standpoint, the cash transaction value of $170 million, or $11.43 per share, indicates a robust valuation for Vericity, reflecting its strategic importance and growth potential. Investors should note the premium pricing compared to typical market valuations, which often signals confidence in the acquired company's future performance. Such all-cash deals also provide immediate liquidity to shareholders, which can be reinvested elsewhere.

In the short term, there may be minimal impact on Vericity's operations, but over the long term, iA Financial Corporation's ownership could foster new synergies, potentially enhancing Vericity's market position and profitability. Investors should watch for integration progress and any cost-saving measures or technological advancements that iA might bring in.

This form of industry consolidation often aims to leverage combined expertise and streamline operations, which can lead to improved efficiency and profitability. However, the success of such mergers depends on effective integration and realization of projected synergies.

Insurance Industry Expert

For the life insurance sector, Vericity's acquisition is notable for several reasons. Vericity's focus on direct-to-consumer life insurance solutions addresses a growing market trend towards more accessible and affordable insurance options, especially for the middle market. Their innovative use of AI and data analytics in underwriting and sales processes signifies a modern approach that can potentially reshape consumer interactions and improve efficiency.

iA Financial Corporation's acquisition suggests a strategic move to enhance its digital capabilities and broaden its market reach. The focus on products that are not medically underwritten at the time of sale highlights a shift towards simplifying consumer experiences and broadening insurance accessibility.

From an industry perspective, this acquisition could serve as a benchmark for future deals, emphasizing the importance of digital transformation in the insurance domain. Investors should be aware that while technological advancements offer significant benefits, they also come with implementation challenges and the need for continuous innovation to stay competitive.

NEW YORK, June 28, 2024 /PRNewswire/ -- J.C. Flowers & Co. LLC ("J.C. Flowers" or "the Firm"), a leading private investment firm dedicated to investing globally in the financial services industry, announced today it has completed the sale of Vericity, Inc. ("Vericity" or "the Company") (NASDAQ: VERY), a leader in direct-to-consumer life insurance solutions, to iA American Holdings, Inc., a subsidiary of iA Financial Corporation, Inc. (collectively, "iA") (TSE: IAG), 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.   

"This is a great outcome for Vericity and J.C. Flowers, and we are proud of the transformation achieved at the Company under our ownership," said Eric Rahe, Managing Director and Co-President at J.C. Flowers. "Through our partnership with the Company's management, Vericity is now able deliver more efficiency and better solutions for consumers by harnessing the power of innovative proprietary technology, including AI and data analytics. We believe the Company is poised for continued growth, and we wish the Vericity team well in the future."

Vericity, 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, Vericity aims to make life insurance more affordable and accessible for middle market consumers by leveraging digitally enabled sales and underwriting processes, quick policy issuance, and an emphasis on products not medically underwritten at the time of sale.

"Having the benefit of J.C. Flowers' deep experience in financial services, and in particular the insurance sector, has been invaluable as we worked together to transform and grow the Company into a true leader in the space," said James Hohmann, Vericity's Chief Executive Officer. "We thank the J.C. Flowers team for its support, and we look forward to Vericity's new chapter with iA."

About J.C. Flowers & Co.

J.C. Flowers is a leading private investment firm dedicated to investing globally in the financial services industry.  Founded in 1998, the firm has invested more than $18 billion of capital, including co-investment, in 66 portfolio companies in 18 countries across a range of industry subsectors including banking, insurance and reinsurance, securities firms, specialty finance, and services and asset management.  With approximately $5 billion of assets under management, J.C. Flowers has offices in New York, London and Palm Beach. For more information, please visit www.jcfco.com.

Media Contact:
Jennifer Hurson
Lambert
845-507-0571
jhurson@lambert.com

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SOURCE J.C. Flowers & Co.

FAQ

What company acquired Vericity (VERY) in June 2024?

iA American Holdings, a subsidiary of iA Financial , acquired Vericity.

What was the acquisition price per share for Vericity (VERY)?

The acquisition price was $11.43 per share.

When was the definitive merger agreement for Vericity (VERY) signed?

The merger agreement was signed on October 3, 2023.

How much was Vericity (VERY) sold for?

Vericity was sold for approximately $170 million in an all-cash transaction.

What strategic advantages did Vericity (VERY) achieve under J.C. Flowers' ownership?

Vericity achieved greater efficiency and better consumer solutions by leveraging AI and data analytics.