Holding company Tiptree Financial Inc. said it will acquire Fortegra Financial Corp., a Florida-based insurance services firm, in an all cash transaction valued at approximately $218 million.
In the transaction, shareholders of Fortegra will receive $10.00 in cash for each share of Fortegra common stock they own. The price represents a premium of 42.5 percent to the closing price of Fortegra on August 11, 2014, the last trading day prior to this announcement.
The announcement said the boards of directors of both companies, including an independent special committee of the Fortegra board, have unanimously approved the transaction.
Tiptree and Fortegra said they expect to complete the transaction in late 2014 or early 2015 after insurance regulatory approvals and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
There is no financing contingency.
Upon completion of the transaction, Fortegra common shares will no longer be registered with the SEC nor trade on the New York Stock Exchange.
Tiptree, whose operations date back to 2007, currently has subsidiaries in insurance and insurance services, specialty finance, asset management and real estate. Its subsidiaries include Philadelphia Financial Group, Inc., Siena Capital Finance, Muni Funding Company of America and Luxury Mortgage Corp.
Fortegra, headquartered in Jacksonville, Florida, offers payment protection products, motor club memberships, service contracts, device and warranty services, and administration services to insurance companies, retailers, dealers, insurance brokers and agents and financial services companies. Fortegra’s brands include Fortegra, Life of the South, 4Warranty, ProtectCELL, Continental Car Club, Auto Knight Motor Club, United Motor Club, Consecta, Pacific Benefits Group, and South Bay Acceptance Corp.
In early 2014, North Carolina-based insurance wholesaler AmWINS Group Inc. acquired both Bliss & Glennon, an excess and surplus lines wholesale insurance broker and managing general agency, and eReinsure, an online platform for placing facultative reinsurance, from Fortegra Financial Corp.
RBC Capital Markets, LLC acted as lead financial advisor and Wells Fargo Securities, LLC acted as financial advisor and lead financing arranger to Tiptree. Willis Capital Markets & Advisory acted as financial advisor to Fortegra.