United Fire Group, Inc. (Nasdaq:UFCS) (the "Company" or "UFG")
announced today that its subsidiary, United Fire & Casualty
Company ("United Fire"), has entered into a definitive agreement
with Kuvare US Holdings, Inc. ("Kuvare") to sell its subsidiary,
United Life Insurance Company ("United Life"), for $280 million in
cash, subject to specified adjustments as set forth in the
definitive agreement (the “Sale”). The purchase price represents a
multiple of 1.2 times GAAP book value and 1.4 times GAAP book value
excluding unrealized investment gains. The closing of the Sale,
which is currently expected to occur in the first half of 2018, is
subject to customary conditions, including regulatory approval. The
Company anticipates that proceeds from the Sale will be used for
various capital management initiatives which may include continued
share repurchases, regular and extraordinary shareholder dividends
and potential future acquisitions.
"The decision to sell our life subsidiary to Kuvare was made in
the best interest of UFG, its shareholders and United Life, from
both a business perspective and a personal perspective," said UFG
President and Chief Executive Officer Randy Ramlo. "By selling
United Life to Kuvare, we have established a solid future for our
life insurance employees, insurance agents and customers, while
allowing us to continue to build on the success of our property and
casualty operations.
"Kuvare is committed to the growth and profitability of United
Life, with the resources and expertise to propel the company
forward," continued Ramlo. "We are pleased with Kuvare's desire to
maintain a strong presence in Cedar Rapids and retain the United
Life brand, ensuring a seamless transition for United Life staff,
its agents and policyholders, which made this difficult decision
easier to make.
"With the Sale, UFG will continue to invest in our successful
property and casualty and surety operations including initiatives
in enterprise analytics and a new multi-year technology platform to
enhance core underwriting decisions and productivity. By dedicating
all of our resources to our core business segment, we can position
ourselves for future growth and profitability, continually
strengthening our financial performance and enhancing our value for
shareholders."
"Kuvare is excited to have United Life join its growing life and
annuity insurance business. United Life's exceptional people, deep
distribution relationships and complementary product portfolio will
enhance our ability to continue to provide outstanding service to
our clients and distribution partners. We look forward to building
on United Life's success and supporting its next phase of growth,"
commented Kuvare Chief Executive Officer Dhiren Jhaveri.
"United Life has been part of our UFG family of companies for
more than 55 years," continued Ramlo. "It was founded by us in 1962
to complement our property and casualty insurance products, and has
been a positive contributor to our success over the years, thanks
to the ambition and dedication of its staff. I cannot overstate the
level of professionalism and integrity displayed by United Life
employees, who faithfully deliver on their brand promise of simple
insurance solutions for agents and policyholders. The company’s
resolve to always put the needs of customers first is a hallmark of
their service and will continue with Kuvare. Though this decision
does not come without a sense of sadness, it is exceeded by a
larger sense of opportunity. We are confident United Life and its
staff will thrive under the leadership of Kuvare."
Sandler O’Neill + Partners, L.P. is acting as exclusive
financial advisor and Sidley Austin LLP is acting as legal advisor
to United Fire in connection with this transaction.
About United Fire Group, Inc.
Founded in 1946 as United Fire & Casualty Company, United
Fire Group, Inc., through its insurance company subsidiaries, is
engaged in the business of writing property and casualty insurance
and life insurance and selling annuities.
Through our subsidiaries, we are licensed as a property and
casualty insurer in 46 states, plus the District of Columbia, and
we are represented by approximately 1,200 independent agencies.
A.M. Best Company assigns a rating of “A” (Excellent) for the
members of United Fire & Casualty Group. Our subsidiary, United
Life Insurance Company, is licensed in 37 states, represented by
approximately 1,500 independent life agencies and rated "A-"
(Excellent) by A.M. Best Company. For more information about United
Fire Group, Inc. visit www.ufginsurance.com.
Contacts:
Investors: Randy Patten, AVP of Finance and Investor Relations,
319-286-2537 or IR@unitedfiregroup.com
Media: Colleen Scholer, Corporate Communication Manager,
319-399-5622 or cscholer@unitedfiregroup.com
About Kuvare US Holdings, Inc.
Kuvare, through its subsidiaries, is a life and annuity company
focused on delivering value-oriented solutions to the
middle-market. Founded in 2015 by insurance company executive
Dhiren Jhaveri, Kuvare is committed to a sustainable growth
strategy, backed by a consortium of long term capital firms
collectively managing more than $20 billion. With the acquisition
of United Life Insurance Company, Chicago-based Kuvare has proforma
consolidated assets of over $2.5 billion. For more information
about Kuvare, visit www.kuvare.com.
Contact:
Alex Jeffrey, 847-921-4099 or alex@fundlab.co
Disclosure of Forward-Looking Statements
This release may contain forward-looking statements about our
operations, anticipated performance and other similar matters. The
Private Securities Litigation Reform Act of 1995 provides a safe
harbor under the Securities Act of 1933 and the Securities Exchange
Act of 1934 for forward-looking statements. The forward-looking
statements are not historical facts and involve risks and
uncertainties that could cause actual results to differ from those
expected and/or projected. Such forward-looking statements are
based on current expectations, estimates, forecasts and projections
about our company, the industry in which we operate, and beliefs
and assumptions made by management. Words such as "expect(s),"
"anticipate(s)," "intends(s)," "plan(s)," "believe(s)"
"continue(s)," "seek(s)," "estimate(s)," "goal(s)," "remain
optimistic," "target(s)," "forecast(s)," "project(s),"
"predict(s)," "should," "could," "may," "will," "might," "hope,"
"can" and other words and terms of similar meaning or expression in
connection with a discussion of future operations, financial
performance or financial condition, are intended to identify
forward-looking statements. These statements are not guarantees of
future performance and involve risks, uncertainties and assumptions
that are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed in such
forward-looking statements. Information concerning factors that
could cause actual outcomes and results to differ materially from
those expressed in the forward-looking statements is contained in
Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K
for the year ended December 31, 2016, filed with the
Securities and Exchange Commission ("SEC") on February 28,
2017. The risks identified in our Form 10-K are representative of
the risks, uncertainties, and assumptions that could cause actual
outcomes and results to differ materially from what is expressed in
the forward-looking statements. In addition, numerous factors could
cause actual results with respect to the Sale to differ materially
from those in the forward-looking statements, including without
limitation, the ability to obtain governmental approvals of the
Sale on the proposed terms and schedule contemplated by the
parties; disruption from the Sale making it more difficult to
maintain business and operational relationships; and the
possibility that the Sale does not close, including, but not
limited to, failure to satisfy the closing conditions. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release or as
of the date they are made. Except as required under the federal
securities laws and the rules and regulations of the SEC, we do not
have any intention or obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
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