/NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR
DISSEMINATION IN THE UNITED
STATES/
TORONTO, Aug. 15, 2019 /CNW/ - Intact Financial
Corporation (TSX: IFC) ("Intact" or the "Company") announced today
that it has entered into an agreement with a group of underwriters,
led by TD Securities Inc. and CIBC Capital Markets for the issuance
of 3.3 million subscription receipts at a price of
$120.45 per subscription receipt
(less an underwriting fee) for gross proceeds of $401 million (the "Offering") pursuant to a
bought deal public offering in Canada and to qualified institutional buyers
in accordance with Rule 144A of the U.S. Securities Act of 1933, as
amended ("the U.S. Securities Act"). Each subscription receipt will
entitle the holder to receive one common share of Intact upon
closing of the Acquisition (as defined below). Intact has also
granted the underwriters the option to buy an additional 0.5
million subscription receipts exercisable at the Offering price for
a period ending 30 days after the closing of the Offering for
additional gross proceeds of up to approximately $60 million. The Offering is expected to close on
August 26, 2019.
The Company is pursuing the Offering to finance a portion of the
purchase price for the previously announced acquisition of The
Guarantee Company of North America
("The Guarantee") and Frank Cowan Company Limited ("Frank Cowan")
from Princeton Holdings Limited (the "Acquisition"). The Guarantee
is a specialty insurer in Canada
and the U.S. and Frank Cowan is a
managing general agent focused on specialty insurance.
Intact expects the Acquisition to generate a return of capital
above its threshold and expects the Acquisition to be immediately
accretive to net operating income per share ("NOIPS") with low
single-digit NOIPS accretion within 24 months after close. The
financing structure of the Acquisition preserves Intact's strong
capital position at closing with an estimated total capital margin
of approximately $1.2 billion, an
estimated MCT of 195% and a debt to total capital ratio of
approximately 21% at year end.
The subscription receipts and the common shares underlying the
subscription receipts of Intact have not been, and will not be
registered under the U.S. Securities Act, or the securities laws of
any state of the United States and
may not be offered, sold or delivered, directly or indirectly,
within the United States, except
in certain transactions exempt from, or not subject to, the
registration requirements of the U.S. Securities Act and applicable
state securities laws. This press release does not constitute an
offer to sell or a solicitation of an offer to buy the subscription
receipts or the common shares underlying the subscription receipts
within the United States or in any
jurisdiction in which such offer or solicitation would be
unlawful.
About Intact Financial Corporation
Intact Financial Corporation (TSX: IFC) is the largest provider
of property and casualty insurance in Canada and a leading provider of specialty
insurance in North America, with
over $10 billion in total annual
Direct Premiums Written. The Company has approximately 14,000 full-
and part-time employees who serve more than five million personal,
business and public-sector clients through offices in Canada and the U.S. In Canada, Intact distributes insurance under the
Intact Insurance brand through a wide network of brokers, including
its wholly-owned subsidiary BrokerLink, and directly to consumers
through belairdirect. In the U.S., OneBeacon Insurance Group, a
wholly-owned subsidiary, provides specialty insurance products
through independent agencies, brokers, wholesalers and managing
general agencies.
Forward Looking Statements
This press release contains forward-looking statements. When
used in this press release, the words "may", "will", "would",
"should", "could", "expects", "plans", "intends", "trends",
"indications", "anticipates", "believes", "estimates", "predicts",
"likely", "potential" or the negative or other variations of these
words or other similar or comparable words or phrases, are intended
to identify forward- looking statements. This press release
contains forward-looking statements with respect to, among other
things, the size of the Offering, the use of proceeds of the
Offering, the anticipated closing of the Offering and the
anticipated effect of the Acquisition and the financing on the
Company's total capital margin, MCT and debt to total capital
ratio.
Forward-looking statements are based on estimates and
assumptions made by management based on management's experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors that management
believes are appropriate in the circumstances. Many factors
could cause the Company's actual results, performance or
achievements or future events or developments to differ materially
from those expressed or implied by the forward- looking statements,
including, without limitation the timing and completion of the
Offering.
Certain material factors or assumptions are applied in making
these forward-looking statements, including completion of the
Offering.
All of the forward-looking statements included in this press
release are qualified by these cautionary statements, those made in
the "Risk Management" section of management's discussion and
analysis of operating and financial results for the year ended
December 31, 2018 and those that may
be made in the prospectus supplement to be filed in respect of the
Offering. These factors are not intended to represent a complete
list of the factors that could affect the Company. These factors
should, however, be considered carefully. Although the forward-
looking statements are based upon what management believes to be
reasonable assumptions, the Company cannot assure investors that
actual results will be consistent with these forward-looking
statements. Investors should not rely on forward-looking statements
to make decisions and investors should ensure the preceding
information is carefully considered when reviewing forward-looking
statements made in this press release. The Company has no intention
and undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Non-IFRS Measures
The Company uses both International Financial Reporting
Standards ("IFRS") and certain non-IFRS measures to assess
performance. Non-IFRS measures do not have any standardized meaning
prescribed by IFRS and are unlikely to be comparable to any similar
measures presented by other companies. Management analyzes
performance based on underwriting ratios such as combined, expense,
loss and claims ratios, MCT, RBC and debt-to-total capital, as well
as other non-IFRS financial measures, namely DPW, change or growth
in constant currency, underlying current year loss ratio,
underwriting income (loss), underwriting expenses, NEP, NOI, NOIPS,
OROE, ROE, AROE, non-operating results, net distribution income,
adjusted net income, AEPS, total net claims, and total capital
margin. See section 27 of the Annual MD&A, which is posted
under the Company's profile on SEDAR at www.sedar.com, for the
definition and historical reconciliation to the most comparable
IFRS measure, where such a measure exists.
SOURCE Intact Financial Corporation