Darien, Ill.-based online brokerage Quotesmith.com announced that it has reached a definitive agreement to acquire the assets of privately held Life Quotes Inc., an Evergreen, Colo.-based life insurance agency which boasts, “Where you never have to meet a life insurance salesman.”
Terms of the agreement, which Quotesmith hopes will add $10 million in annual revenue, were not disclosed.
Quotesmith.com, which has yet to report a profit and lost $1.3 million in 2003, also announced an agreement to sell 2.36 million shares of its common stock to Zions Bancorp. for $5.50 net per share, thus raising $13 million in new capital, which is contingent upon the closing of the Life Quotes asset acquisition. After the completion of this capital transaction, Quotesmith.com will have 7.3 million outstanding common shares, with Zions holding a 32 percent equity interest and one board seat.
The company said it expects the Life Quotes acquisition to double the revenues of Quotesmith.com and accelerate its path to profitability. The combined firm will serve an installed customer base of 200,000 policyholders.
These agreements, which are subject to shareholder approval, are expected to close in the second quarter of 2004. Members of the Quotesmith.com management team holding more than 60 percent of the firm’s outstanding capital stock have indicated their intention to vote in favor of these transactions at an upcoming shareholders’ meeting.
Founded in 1979, Life Quotes is a marketer of term life insurance utilizing direct response marketing methods combined with a call center staffed with licensed agents.
The company said the ability to offer personal advice and service by phone will “add muscle” to the firm’s retail insurance distribution capabilities and give every customer the choice of buying online or by phone.
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