Constellation to acquire Columbian Mutual Life Insurance

Binghamton, New York-based Columbian Mutual Life Insurance Company has agreed to convert to a stock company with all shares acquired by Constellation Insurance Holdings.

Binghamton, New York-based Columbian Mutual Life Insurance Company has agreed to convert to a stock company with all shares acquired by Constellation Insurance Holdings. Constellation will invest up to $100 million to fund payments to policyholders and strengthen capitalization. The deal is expected to close in H1 2022. Constellation, a New York-based insurance platform, was launched in 2019 by Caisse de dépôt et placement du Québec and Ontario Teachers’ Pension Plan.

PRESS RELEASE

BINGHAMTON, N.Y., June 30, 2021 /PRNewswire/ — Columbian Mutual Life Insurance Company (“Columbian”) today announced that its Board of Directors has unanimously approved a strategic transaction with Constellation Insurance Holdings, Inc. (“Constellation”). This includes the conversion of Columbian to a stock company and the issuance of all of its newly issued stock to Constellation pursuant to a sponsored demutualization. Constellation, an insurance holding company, is backed by Caisse de dépôt et placement du Québec (“CDPQ”) and Ontario Teachers’ Pension Plan Board (“Ontario Teachers'”), two of North America’s largest and premier long-term institutional investors.

Since 1882, Columbian has offered high-quality, affordable life insurance protection to consumers in all 50 states. Its affiliated companies have US$1.8 billion in assets and over 750,000 policyholders.

The strategic transaction provides for Constellation to invest up to US$100 million to fund cash payments to eligible policyholders and to significantly strengthen capitalization and financial ratings of Columbian. The transaction will help protect and enhance Columbian’s policyholder interests as well as allow for investments in the future growth of the business.

“Constellation’s investment is transformative from a strategic and financial perspective and provides access to long-term capital, improved balance sheet strength, stronger financial ratings and the ability to continue to invest in technology and automation,” said Michael Fosbury, President and Chief Executive Officer, Columbian. “This investment from Constellation will allow Columbian to build on its longstanding strengths, including our brand, our market position in the life insurance segment, our distribution partnerships, and our culture of customer service, to capitalize on the significant growth opportunities in providing affordable protection products for the senior market. All stakeholders will benefit as this transaction positions the company for long-term success.”

“Columbian is an impressive company with significant growth potential. We look forward to partnering with Michael and the management team to significantly accelerate Columbian’s organic and inorganic growth trajectory and firmly position the company as a leader in targeted life insurance market segments,” said Anurag Chandra, Constellation’s founder, Chairman Chief Executive Officer. “This transaction and the recently announced Ohio National demutualization demonstrate the compelling value proposition Constellation offers to life and P&C insurers who are looking for access to long-term growth capital, enhanced ratings and scale efficiencies, while preserving their independent identity, brand, operations and culture.”

The transaction is anticipated to close in the first half of 2022, subject to regulatory and policyholder approvals. Following the closing of the transaction, Columbian will maintain its brand and leadership team, and the company’s offices will remain in Binghamton and Syracuse.
Eversheds Sutherland is serving as legal counsel to Columbian and its Board of Directors. Keefe, Bruyette & Woods (KBW), A Stifel Company is serving as financial advisor to Columbian and its Board of Directors. Milliman is serving as actuarial services provider to Columbian. Debevoise & Plimpton LLP is serving as legal counsel to Constellation.

ABOUT COLUMBIAN MUTUAL INSURANCE COMPANY
Since 1882, Columbian has provided value through quality, affordable life insurance protection. Columbian’s consumer-oriented products are designed to make a positive difference in policyholder’s lives by enhancing financial security when needed most. The company is licensed in all 50 states and has grown over the years through a series of strategic mergers and acquisitions. Columbian’s affiliated companies have $1.8 billion in assets and over 750,000 policyholders.