Canada’s Constellation Insurance Holdings, Inc. has agreed to acquire Cincinnati-based life and disability insurer Ohio National Mutual Holdings, Inc. and its wholly owned subsidiary Ohio National Financial Services, Inc. for a total consideration of US$1 billion.
The $1 billion figure includes both member consideration and new capital infused in the business, as part of its demutualization process. The transaction includes the conversion of ONMH to a stock company and the issuance of all of its newly issued stock to Constellation.
Constellation Insurance Holdings is backed by institutional investors Caisse de dépôt et placement du Québec (CDPQ) and Ontario Teachers’ Pension Plan Board. It targets acquisitions of life and property/casualty insurers based in North America.
Ratings agency AM Best said its credit profile of the Ohio National Life Group is unchanged and is unlikely to change over the near term as a result of the transaction.
According to AM Best, also as part of the transaction, Constellation and its investors are committing to infusing an additional $500 million of capital over a four-year period following the closing of the transaction.
Upon closing, Ohio National will maintain its management team and brand, and will continue to be headquartered in Cincinnati.
Established in 1909, Ohio National sells financial services in 49 states. As of December 31, 2020, its affiliated companies have US$41.2 billion in assets under management. Its products are issued by The Ohio National Life Insurance Co. and Ohio National Life Assurance Corp.
“Today’s announcement marks an important first step for Constellation, as we deliver on our strategy to provide North American stock and mutual insurers access to long-term growth capital, enhanced ratings, scale efficiencies and aligned equity incentives, while preserving the independence, brand, existing operations and culture for which they are recognized,” said Anurag Chandra, founder, chairman and chief executive officer CEO of Constellation.
The transaction is subject to customary approvals, including by the Ohio director of insurance and ONMH’s members.
Debevoise & Plimpton LLP is serving as legal counsel to Constellation in the transaction.
Source: Caisse de dépôt et placement du Québec
Topics Mergers & Acquisitions Ohio Canada
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