The Allstate Corporation (NYSE: ALL) has agreed to acquire National
General Holdings Corporation for approximately $4 billion in cash,
or $34.50 per share. The transaction is expected to close in early
2021, subject to regulatory approvals and other customary closing
conditions.
“Acquiring National General accelerates Allstate’s strategy to
increase market share in personal property-liability and
significantly expands our independent agent distribution,” said Tom
Wilson, Chair, President and CEO. “The acquisition increases
personal lines premiums by $4.0 billion and market share by over 1
percentage point to 10%. National General’s business and technology
platforms will be utilized to further strengthen Allstate’s
existing independent agent businesses. The transaction will be
accretive to adjusted net income earnings per share and return on
equity beginning in the first year.”
National General provides a wide range of property-liability
products through independent agents with a significant presence in
non-standard auto insurance. The company also has attractive
Accident and Health and Lender-Placed Insurance businesses. Gross
premiums written were $5.6 billion, which generated operating
income of $319 million in 2019.
“National General’s operating expertise has enabled us to serve
customers and independent agents well as we have grown both
organically and through acquisition,” said Barry Karfunkel,
Co-Chairman and CEO of the New York-based insurer. “We are excited
about combining our team’s expertise and commitment with Allstate
to become a top-five personal lines carrier for independent agents
while offering a broader array of products. National General’s
shareholders are also benefiting by unlocking the value created
over the last decade.”
Transaction DetailsNational General
shareholders will receive $32.00 per share in cash from Allstate,
plus closing dividends expected to be $2.50 per share, providing
$34.50 in total value per share. Allstate will fund the share
purchase by deploying $2.2 billion in combined cash resources and,
subject to market conditions, issuing $1.5 billion of new senior
debt. Allstate expects to maintain its current share repurchase
program.
National General’s board of directors has approved the
transaction, which includes customary terms and conditions,
including a breakup fee of $132.5 million. A voting agreement has
also been signed with entities controlling 40% of National
General’s common shares to vote for the transaction.
MSD Capital, which owns approximately 7.4% of National General’s
outstanding common shares, also supports the transaction. “As proud
shareholders since 2013, we support the decision of National
General’s board of directors to move forward with this strategic
transaction,” said John Phelan, Managing Partner and Co-Founder of
MSD Capital, LP and MSD Partners, LP. Dan Bitar, a Managing
Director of MSD Capital, added, “We believe the transaction is
allowing National General’s employees, customers and shareholders
to benefit from the significant franchise value created by the
management team over the last decade.”
Ardea Partners LP was the exclusive financial adviser to
Allstate, and Willkie Farr & Gallagher LLP was the company’s
legal adviser. J.P. Morgan Securities LLC was the exclusive
financial adviser to National General, and Paul, Weiss, Rifkind,
Wharton & Garrison LLP was National General’s legal
counsel.
WebcastAllstate will conduct a teleconference
and webcast at 7:30 a.m. Central Time on Wednesday, July 8, to
discuss the acquisition. The investor webcast can be accessed at
www.allstateinvestors.com. A replay and downloadable audio file
will be posted on the company’s website shortly after the event
ends.
About AllstateThe Allstate Corporation (NYSE:
ALL) protects people from life’s uncertainties with more than 153.7
million proprietary policies. Allstate offers a broad array of
protection products through multiple brands and diverse
distribution channels, including auto, home, life and other
insurance. Allstate is widely known from the slogan “You’re in Good
Hands with Allstate.”
Financial information, including material announcements about
The Allstate Corporation, is routinely posted on
www.allstateinvestors.com.
About National General National General,
headquartered in New York City, is a specialty personal lines
insurance holding company serving a wide range of customer segments
through a network of approximately 42,300 independent agents for
property-casualty products. National General traces its roots
to 1939, has a financial strength rating of A- (excellent)
from A.M. Best, and provides personal and commercial
automobile, homeowners, umbrella, recreational vehicle, motorcycle,
lender-placed, supplemental health and other niche insurance
products. Auto insurance represents approximately 60% of premium
with a significant presence in the non-standard auto market. Its
property-casualty business was built through a combination of
organic growth and opportunistic acquisitions. National General
earns attractive margins and generated operating return on average
equity in excess of 16% in 2019, with net income of $314 million,
up 79% from the prior year. Gross premiums written in 2019 were
$5.6 billion.
Additional Information and Where to Find
It This press release may be deemed to be
solicitation in respect of the transaction. In connection with the
transaction, National General intends to file relevant materials
with the SEC, including National General’s proxy statement on
Schedule 14A. National General stockholders are urged to read all
relevant documents filed with the SEC, including National General’s
proxy statement when it is available, because they will contain
important information about the transaction. Investors and security
holders will be able to obtain the documents free of charge on the
SEC’s website at www.sec.gov, and National General stockholders
will receive information at an appropriate time on how to obtain
documents free of charge from National General that are not
currently available.
National General and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
holders of National General common stock in respect of the
transaction. Information about National General’s directors and
executive officers is set forth in the proxy statement for National
General’s 2020 Annual General Meeting of Shareholders, which was
filed with the SEC on March 12, 2020. Investors may obtain
additional information regarding the interest of such participants
by reading the proxy statement regarding the transaction when it
becomes available.
Forward-Looking Statements
This press release contains “forward-looking statements” that
anticipate results based on estimates, assumptions and plans that
are subject to uncertainty. These statements are made subject to
the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements do not relate
strictly to historical or current facts and may be identified by
their use of words like “plans,” “seeks,” “expects,” “will,”
“should,” “anticipates,” “estimates,” “intends,” “believes,”
“likely,” “targets” and other words with similar meanings. The
management of Allstate or National General believe these statements
are based on reasonable estimates, assumptions and plans. However,
if the estimates, assumptions or plans underlying the
forward-looking statements prove inaccurate or if other risks or
uncertainties arise, actual results could differ materially from
those communicated in these forward-looking statements. Factors
that could cause actual results to differ materially from those
expressed in, or implied by, the forward-looking statements
include, but are not limited to the “Risk Factors” section in the
most recent Annual Report on Form 10-K for each of Allstate and
National General. Forward-looking statements speak only as of the
date on which they are made, and Allstate and National General
assume no obligation to update or revise any forward-looking
statement.
No Solicitation
This press release is not intended to and shall not constitute
the solicitation of any vote of approval.
Contacts, Allstate: |
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Greg
Burns |
Mark
Nogal |
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Media
Relations |
Investor Relations |
(847)
402-5600 |
(847)
402-2800 |
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Contacts, National General: |
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Jodi
Swartz |
Cliff
Gallant |
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Media
Relations |
Investor Relations |
(833)
684-0492 |
(212)
380-9462 |
|
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