LAS VEGAS and DES MOINES, Iowa, May
24, 2017 /PRNewswire/ -- CF Corporation
(NASDAQ: CFCO) ("CF Corp."), and Fidelity & Guaranty Life
(NYSE: FGL) ("FGL"), a leading provider of fixed indexed annuities
and life insurance in the U.S., today announced that their boards
of directors have each unanimously approved a definitive merger
agreement under which CF Corp. will acquire FGL for $31.10 per share in cash, or a total of
approximately $1.835 billion, plus
the assumption of $405 million of
existing debt. The purchase consideration implies a value of 1.1x
adjusted book value[1] as of March 31,
2017. The investor group, which includes the founders of CF
Corp., Chinh E. Chu, and
William P. Foley, II, funds
affiliated with Blackstone (NYSE: BX), and Fidelity National
Financial (NYSE: FNF) ("FNF"), will invest approximately
$900 million in common and preferred
equity to fund the transaction.
FGL is a leading provider of fixed indexed annuities and life
insurance products, with approximately $28
billion of GAAP Total Assets and approximately $1.6 billion of adjusted book value1.
FGL has grown sales by approximately 10% annually from 2012 to
2016, supported by its long-standing relationships with
distribution partners, changing U.S. retirement demographics, and
an attractive product value proposition to policyholders.
Following the close of the transaction, FGL will continue to be
led by its current management team under Chris Littlefield as President and CEO. FGL will
remain headquartered in Des Moines,
Iowa, and will continue operations from Baltimore, Maryland, and Lincoln, Nebraska. Messrs. Chu and Foley will
serve as Executive Chairmen of the Board, which will be composed of
a majority of independent directors.
Mr. Foley said, "This is an exciting transaction that we expect
will enable us to generate attractive returns for our shareholders
by accelerating FGL's growth and profitability through efficient
structuring and improved investment management capabilities. I look
forward to working closely with Chris and the entire management
team to help advance FGL's strategy while continuing to provide
industry-leading retirement savings products to policyholders."
Mr. Chu noted, "FGL is a very high-quality business with
attractive demographic tailwinds. We look forward to working with
management to continue to build a premier insurance platform and
accelerate value creation for shareholders. CF Corp. is an ideal
platform for FGL given our permanent capital and blue chip
long-term investor base. This transaction is transformative and the
combination of CF Corp., Blackstone and FNF will add tremendous
value to FGL."
Mr. Littlefield added, "This agreement with CF Corp. is a
terrific conclusion to our strategic review process. This
transaction delivers compelling value to our existing shareholders
and ideally positions FGL for our next phase of growth. We believe
the expertise and insights that our leading investors will bring as
new shareholders of FGL will greatly benefit the company, our
policy owners, distribution partners, agents and employees. We see
a very bright future for FGL."
Key Transaction Terms and Details
The transaction will be financed with $1.2 billion from CF Corp.'s IPO and forward
purchase agreements, and more than $700
million in additional new common and preferred equity. Funds
advised by Blackstone Tactical Opportunities, funds advised by GSO
Capital Partners LP (the credit division of Blackstone) and FNF
have provided a full backstop funding commitment to ensure
certainty of funding.
FGL will enter into an investment management agreement with
affiliates of Blackstone. This agreement will provide access to
Blackstone's superior investment management and strategic oversight
capabilities to drive additional value creation for FGL and
policyholders, while continuing FGL's current focus on high-quality
investment grade assets under the current FGL investment team.
Messrs. Chu and Foley will be involved and will lend their
expertise to the asset management function led by Blackstone.
In connection with the transaction, CF Corp. and HRG Group, Inc.
(NYSE: HRG) ("HRG"), a diversified holding company and FGL's
largest shareholder, have approved a purchase agreement under which
CF Corp. will acquire certain reinsurance companies from HRG.
Timeframe to Completion
The transaction is expected to close in the fourth quarter of
2017, subject to the approval of the shareholders of CF Corp. and
FGL, and receipt of required regulatory approvals and other
customary closing conditions. Certain investors that own
approximately 18% of CF Corp.'s common shares have entered into
voting agreements to support the transaction. In addition,
following the execution of the merger agreement, HRG, in its
capacity as the majority shareholder of FGL, delivered to CF Corp.
a written consent approving and adopting the merger agreement.
Advisors
Bank of America Merrill Lynch and FT Partners are acting as
financial advisors to CF Corp., Citigroup is acting as a capital
markets advisor and Winston & Strawn LLP, Hogan Lovells US LLP
and Debevoise & Plimpton LLP are acting as legal advisors.
Lazard is acting as financial advisor to Blackstone and
Debevoise & Plimpton LLP is acting as legal advisor. Sullivan
& Cromwell LLP is acting as legal advisor to GSO Capital
Partners LP.
Credit Suisse is acting as lead financial advisor to FGL and
Jefferies is acting as co-financial advisor to FGL. Rothschild is
acting as additional financial advisor to FGL. Skadden, Arps,
Slate, Meagher & Flom LLP is acting as legal advisor to
FGL.
Transaction Website
A website with additional information on the transaction can be
found here: www.cfcorpandfidelity.com.
About CF Corporation
CF Corporation's primary objective is to build an enduring, high
quality business by using permanent capital, a core tenet of the CF
Corp. structure. CF Corp. also has the largest individual founder
co-investment in a U.S. special purpose acquisition company, which
results in alignment of interests with CF Corp.'s investors.
About Fidelity & Guaranty Life
Fidelity & Guaranty Life, an insurance holding company,
helps middle-income Americans prepare for retirement. Through its
subsidiaries, the company offers fixed annuity and life insurance
products distributed by independent agents through an established
network of independent marketing organizations. Fidelity &
Guaranty Life is headquartered in Des
Moines, Iowa and trades on the New York Stock Exchange under
the ticker symbol FGL. For more information, please visit
www.fglife.com.
About Blackstone
Blackstone is one of the world's leading investment firms. We
seek to create positive economic impact and long-term value for our
investors, the companies we invest in, and the communities in which
we work. We do this by using extraordinary people and flexible
capital to help companies solve problems. Our asset management
businesses, with over $360 billion in
assets under management, include investment vehicles focused on
private equity, real estate, public debt and equity, non-investment
grade credit, real assets and secondary funds, all on a global
basis. Further information is available at www.blackstone.com.
Follow Blackstone on Twitter @Blackstone.
Forward-Looking Statements
This press release contains, and certain oral statements made by
representatives of CF Corp. and FGL, and their respective
affiliates, from time to time may contain, "forward-looking
statements" within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. CF Corp.'s
and FGL's actual results may differ from their expectations,
estimates and projections and consequently, you should not rely on
these forward looking statements as predictions of future events.
Words such as "expect," "estimate," "project," "budget,"
"forecast," "anticipate," "intend," "plan," "may," "will," "could,"
"should," "believes," "predicts," "potential," "might" and
"continues," and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements
include, without limitation, CF Corp.'s and FGL's expectations with
respect to future performance and anticipated financial impacts of
the business combination, the satisfaction of the closing
conditions to the business combination and the timing of the
completion of the business combination. These forward-looking
statements involve significant risks and uncertainties that could
cause actual results to differ materially from expected results.
Most of these factors are outside CF Corp.'s and FGL's control and
are difficult to predict. Factors that may cause such differences
include, but are not limited to: (1) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement relating to the proposed
business combination; (2) the outcome of any legal proceedings that
may be instituted against CF Corp. or FGL following the
announcement of the merger agreement and the transactions
contemplated therein; (3) the inability to complete the business
combination, including due to failure to obtain approval of the
shareholders of CF Corp. or other conditions to closing in the
merger agreement; (4) delays in obtaining or the inability to
obtain necessary regulatory approvals (including approval from
insurance regulators) required to complete the transactions
contemplated by the merger agreement; (5) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the merger agreement or could otherwise cause the
transaction to fail to close; (6) the inability to obtain or
maintain the listing of the post-acquisition company's ordinary
shares on NASDAQ following the business combination; (7) the risk
that the business combination disrupts current plans and operations
as a result of the announcement and consummation of the business
combination; (8) the ability to recognize the anticipated benefits
of the business combination, which may be affected by, among other
things, competition, the ability of the combined company to grow
and manage growth profitably and retain its key employees; (9)
costs related to the business combination; (10) changes in
applicable laws or regulations; (11) the possibility that FGL or
the combined company may be adversely affected by other economic,
business, and/or competitive factors; and (12) other risks and
uncertainties identified in CF Corp.'s proxy statement relating to
the business combination, including those under "Risk Factors"
therein, and in CF Corp.'s and FGL's other filings with the
Securities and Exchange Commission ("SEC"). CF Corp. and FGL
caution that the foregoing list of factors is not exclusive. CF
Corp. and FGL caution readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made.
CF Corp. and FGL do not undertake or accept any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements to reflect any change in its
expectations or any change in events, conditions or circumstances
on which any such statement is based, subject to applicable law.
The information contained in any website referenced herein is not,
and shall not be deemed to be, part of or incorporated into this
press release.
No Offer or Solicitation
This press release is for informational purposes only and shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities pursuant to the proposed transactions or
otherwise, nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
No Assurances
There can be no assurance that the proposed business combination
will be completed, nor can there be any assurance, if the business
combination is completed, that the potential benefits of combining
the companies will be realized. The description of the business
combination contained herein is only a summary and is qualified in
its entirety by reference to the definitive agreements relating to
the business combination, copies of which will be filed by CF Corp.
with the SEC as an exhibit to a Current Report on Form 8-K.
Important Information For Investors and Shareholders
In connection with the proposed business combination, CF Corp.
intends to file a preliminary proxy statement and a definitive
proxy statement with the United States Securities and Exchange
Commission ("SEC"). CF Corp.'s shareholders and other interested
persons are advised to read, when available, the preliminary proxy
statement and the amendments thereto and the definitive proxy
statement and documents incorporated by reference therein as these
materials will contain important information about FGL, CF Corp.
and the business combination. When available, the definitive proxy
statement and other relevant materials will be mailed to
shareholders of CF Corp. as of a record date to be established for
voting on the business combination. Shareholders will also be able
to obtain copies of the preliminary proxy statement, the definitive
proxy statement and other documents filed with the SEC that will be
incorporated by reference therein, without charge, once available,
at the SEC's web site at www.sec.gov, or by directing a request to:
CF Corporation, 1701 Village Center Circle, Las Vegas, Nevada 89134, Attention:
Douglas B. Newton, Chief Financial
Officer (212) 355-5515 or by accessing CF Corp.'s website at
www.cfcorpandfidelity.com.
Participants in the Solicitation
CF Corp. and its directors and executive officers may be deemed
participants in the solicitation of proxies from CF Corp.'s
shareholders with respect to the business combination. A list of
the names of those directors and executive officers and a
description of their interests in CF Corp. is contained in CF
Corp.'s annual report on Form 10-K for the fiscal year ended
December 31, 2016, which was filed
with the SEC and is available free of charge at the SEC's web site
at www.sec.gov, or by directing a request to CF Corporation, 1701
Village Center Circle, Las Vegas,
Nevada 89134, Attention: Douglas B.
Newton, Chief Financial Officer (212) 355-5515. Additional
information regarding the interests of such participants will be
contained in the proxy statement for the business combination when
available.
FGL and its directors and executive officers may also be deemed
to be participants in the solicitation of proxies from the
shareholders of CF Corp. in connection with the business
combination. A list of the names of such directors and executive
officers and information regarding their interests in the business
combination will be included in the proxy statement for the
business combination when available.
CF Corporation Contacts:
Douglas B. Newton, Chief
Financial Officer
CF Corporation
212-355-5515
Jonathan Keehner / Andi Rose / Julie
Oakes
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
FGL Contacts:
Investors:
Lisa Foxworthy-Parker
Fidelity & Guaranty Life
Investor.Relations@fglife.com
515-330-3307
Media:
Jamie Tully / David Millar
Sard Verbinnen & Co
212-687-8080
Blackstone Contact:
Matt Anderson
212-390-2472
[1] Based on GAAP Equity excluding Accumulated Other
Comprehensive Income (as of 3/31/17)
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SOURCE CF Corporation