- Complementary businesses and skills
will create leading specialty personal and commercial lines
property underwriter focused on coastal states
- Combination will have greater market
presence, growth potential and earnings power than the sum of the
two companies separately
- Transaction expected to be immediately
accretive to earnings per share and ROE
- Combined entity will have over $1
billion of premium in force
United Insurance Holdings Corp. (NASDAQ: UIHC) (UPC
Insurance or the Company), a property and casualty insurance
holding company, announced today that it has entered into a Merger
Agreement with RDX Holding, LLC (RDX), the parent of American
Coastal Insurance Company (ACIC or American Coastal), to combine
the companies in an all-stock merger meant to qualify as a tax-free
reorganization.
Under the terms of the transaction, RDX members will receive UPC
Insurance common stock based on an exchange ratio providing for RDX
members to own 49% of the outstanding UPC common stock as of the
signing. Dan Peed, who is the CEO of ACIC and owns a majority of
the stock of RDX, will become non-executive Vice-Chair of UPC’s
Board of Directors and will nominate two additional independent
directors to join the UPC Board, which will be expanded to ten as
part of the transaction. John Forney, UPC’s President and CEO, will
assume the role of CEO of the combined entity. The UPC stock issued
to Mr. Peed as part of the transaction will have certain voting and
transfer restrictions designed to demonstrate his long-term
commitment to the combined entity and his alignment of interest
with other UPC shareholders.
“This is a transformational transaction for UPC, and the
culmination of many months of careful consideration of this
opportunity to accelerate UPC’s path to creating the premier
provider of property insurance in catastrophe-exposed areas,” said
John Forney, President & CEO of UPC Insurance. “ACIC has an
enviable track record of delivering strong earnings and very high
returns on equity to its shareholders. Its market-leading position
in the Florida commercial residential market and its exclusive MGA
agreement with AmRisc provide UPC complementary skills and new
growth opportunities. Dan Peed has proven his ability to create
huge shareholder value, and we look forward to his vision and
leadership as part of the UPC Board.”
“I am excited to join the UPC Insurance team and believe this
merger will build on the excellent platform they have created,
providing more opportunities for growth and profit with our valued
trading partners,” said Dan Peed, CEO of American Coastal.
“John Forney and his team bring an extensive amount of energy and
knowledge, and we share a vision to create one of the strongest
specialty cat underwriters in the U.S. AmRisc is the largest cat
commercial property MGA in the country and will continue to
underwrite on behalf of American Coastal Insurance Company,
bringing many opportunities for continued growth to American
Coastal, UPC Insurance and AmRisc.”
UPC Insurance is being advised in this transaction
by Raymond James & Associates and the law firm
of Sidley Austin LLP. TigerRisk Capital Markets & Advisory
and Willis Capital Markets & Advisory are acting as joint
financial advisors and Debevoise & Plimpton LLP is serving as
legal counsel to RDX in connection with the transaction. The
transaction is subject to certain conditions, including approval by
UPC Insurance’s stockholders of the issuance of shares in the
merger and receipt of required regulatory approvals.
UPC Insurance will conduct a conference call to discuss the
transaction at 8:30 a.m. ET on Thursday, August 18, 2016. The
Company invites interested parties to participate in the conference
call. To listen to the live webcast, please go to
http://upcinsurance.equisolvewebcast.com/transaction. Additional
information with respect to the transaction will be posted in the
investor relations section of the www.upcinsurance.com website.
Conference Call DetailsThursday, August 18, 2016 – 8:30
a.m. ETParticipant Dial-In Numbers:(United States):
877-407-8829(International): 201-493-6724
About UPC Insurance
Founded in 1999, UPC Insurance is an insurance holding company
that sources, writes and services residential property and casualty
insurance policies using a network of independent agents and a
group of wholly owned insurance subsidiaries. UPC Insurance writes
and services property and casualty insurance in Connecticut,
Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, New
York, North Carolina, Rhode Island, South Carolina and Texas, and
is licensed to write in Alabama, Delaware, Maryland, Mississippi,
New Hampshire, and Virginia. From its headquarters in St.
Petersburg, UPC Insurance's team of dedicated professionals manages
a completely integrated insurance company, including sales,
underwriting, customer service and claims.
About ACIC
Founded in 2007, ACIC is a specialty underwriter focused
primarily on the commercial residential property insurance market
in Florida. ACIC has a long term exclusive agreement with AmRisc,
LLC, the largest commercial windstorm MGA in the United States,
which serves as the sole managing general agent to source and
administer business for ACIC. In 2015, ACIC reported $308.5 million
of direct premium written, $36.5 million in after-tax GAAP
earnings, and finished the year with $195.8 million of tangible
book value.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains “forward-looking statements” that
involve significant risks and uncertainties. All statements other
than statements of historical fact are statements that could be
deemed forward-looking statements, including: any statements
regarding the anticipated timing of filings and approvals relating
to the proposed merger; any statements regarding the expected
timing of the completion of the proposed merger; any statements
regarding the ability to complete the proposed merger considering
the various closing conditions; any statements of expectation or
belief; any statement regarding the future financial performance of
the Company; and any statements of assumptions underlying any of
the foregoing. These statements are made as of the date of this
communication and reflect management’s expectations, estimates and
assumptions based on current and available information at the time
the document was prepared. Forward-looking statements often include
words such as “anticipate,” “believe,” “estimate,” “target,”
“expect,” “predict,” “plan,” “possible,” “potential,” “project,”
“hope,” “intend,” “likely,” “will,” “should,” “could,” “may,”
“foreseeable,” “would” and similar expressions. However, the
absence of these words or similar expressions does not mean that a
statement is not forward-looking. Readers are cautioned not to
place undue reliance on forward-looking statements. Forward-looking
statements are not guarantees of future performance and involve
risks, uncertainties and other factors that may cause actual
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
those statements. Risks and uncertainties that could cause results
to differ from expectations include, but are not limited to:
uncertainties as to the timing of the proposed merger; the
possibility that various closing conditions for the proposed merger
may not be satisfied or waived, including that the stockholders of
the Company may not approve the Company’s issuance of common stock,
par value $0.0001 per share, as consideration for the proposed
merger or that a governmental entity may prohibit, delay or refuse
to grant approval for the consummation of the proposed merger; the
effects of disruption from the proposed merger making it more
difficult for the Company to maintain relationships with employees
(including potential difficulties in employee retention); the
response of customers, vendors, other business partners and
governmental entities to the announcement of the proposed merger;
legal proceedings that may be instituted against the Company, its
board of directors, executive officers and others following the
announcement of the definitive agreement entered into in respect of
the merger; other business effects, including the effects of
industrial, economic, political or weather conditions outside of
the Company’s control; transaction costs; actual or contingent
liabilities, including those related to dependence on key
commercial relationships or the expertise of certain personnel; and
other risks and uncertainties discussed in this communication and
other documents filed with the SEC by the Company, as well as the
Schedule 14A to be filed with the SEC by the Company. The Company
does not undertake any obligation to update any forward-looking
statements as a result of new information, future developments or
otherwise, except as expressly required by law.
Additional Information Regarding the Transaction and Where to
Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy the securities of the Company or
the solicitation of any vote or approval. This communication is
being made in respect of the proposed merger transaction involving
the Company, Kilimanjaro Corp., Kili LLC, AmCo Holding Company, RDX
Holding, LLC and certain members of RDX Holding, LLC. The proposed
issuance by the Company of shares of common stock in connection
with such merger will be submitted to the stockholders of the
Company for their consideration. In connection therewith, the
Company intends to file relevant materials with the SEC, including
a definitive proxy statement. However, such documents are not
currently available. The definitive proxy statement will be mailed
to the stockholders of the Company. BEFORE MAKING ANY VOTING OR ANY
INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE DEFINITIVE PROXY STATEMENT REGARDING THE PROPOSED
TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE PROPOSED TRANSACTION. Investors and security holders may obtain
free copies of the definitive proxy statement, any amendments or
supplements thereto and other documents containing important
information about the Company, once such documents are filed with
the SEC, through the website maintained by the SEC at www.sec.gov.
Copies of the documents filed with the SEC by the Company will be
available free of charge on the Company’s website at
www.upcinsurance.com under the heading “Documents” within the “SEC
Filings” section in the “Investors Relations” portion of the
Company’s website. Stockholders of the Company may also obtain a
free copy of the definitive proxy statement and any filings with
the SEC that are incorporated by reference in the definitive proxy
statement by contacting the Company’s Investor Relations Department
at [(727) 895-7737].
Participants in the Solicitation
The Company and its directors, executive officers and certain
other members of management and employees may be deemed to be
participants in the solicitation of proxies in connection with the
proposed transaction. Information about the directors and executive
officers of the Company is set forth in its proxy statement for its
2016 annual meeting of stockholders, which was filed with the SEC
on April 5, 2016, its annual report on Form 10-K for the fiscal
year ended December 31, 2015, which was filed with the SEC on March
2, 2016, and in subsequent documents filed with the SEC, each of
which can be obtained free of charge from the sources indicated
above. Other information regarding the participants in the proxy
solicitation of the stockholders of the Company and a description
of their direct and indirect interests, by security holdings or
otherwise, will be contained in the preliminary and definitive
proxy statements and other relevant materials to be filed with the
SEC when they become available.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160817006149/en/
United Insurance Holdings Corp.John Rohloff,
727-895-7737Director of Financial
Reportingjrohloff@upcinsurance.comorInvestor Relations:The
Equity GroupAdam Prior, 212-836-9606Senior
Vice-Presidentaprior@equityny.com
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