Constellation Insurance to buy Ohio National for $1bn

Constellation Insurance Holdings has agreed to acquire Cincinnati-based financial services company Ohio National Mutual Holdings and its affiliate Ohio National Financial Services.

Constellation Insurance Holdings has agreed to acquire Cincinnati-based financial services company Ohio National Mutual Holdings and its affiliate Ohio National Financial Services. The deal has a total consideration of $1 billion, including new capital invested in the business. New York-based insurance platform Constellation was launched in 2019 by Caisse de dépôt et placement du Québec and Ontario Teachers’ Pension Plan.

PRESS RELEASE

NEW YORK, MONTRÉAL and TORONTO, March 23, 2021 /CNW Telbec/ – Constellation Insurance Holdings, Inc. (Constellation), backed by institutional investors Caisse de dépôt et placement du Québec (CDPQ) and Ontario Teachers’ Pension Plan Board (Ontario Teachers’), announced today it has entered into an agreement for its inaugural transaction through the acquisition of Cincinnati-based Ohio National Mutual Holdings, Inc. (ONMH) and its wholly owned subsidiary Ohio National Financial Services, Inc. (collectively, Ohio National) for a total consideration of US$1 billion, which includes both member consideration and new capital infused in the business, as part of its demutualization process.

Established in 1909, Ohio National is a leading provider of financial products and services that helps its policyholders achieve financial security and independence. It has a network of financial professionals operating across 49 states and, as of December 31, 2020, its affiliated companies have US$41.2 billion in assets under management.

“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,” affirmed Anurag Chandra, Founder, Chairman & CEO of Constellation. “We welcome CDPQ and Ontario Teachers’ upsized long-term capital commitment to continue to expand the platform in North America.”

“Constellation is a uniquely positioned platform, combining long-term capital and deep industry experience to offer differentiated solutions in an increasingly consolidated market. By working closely with Constellation since our initial investment and expanding our commitment alongside a trusted investment partner, Ontario Teachers’, we aim to support insurers who are navigating a complex environment, such as Ohio National, as they embark upon the next phase of their growth,” stated Martin Laguerre, Executive Vice-President and Head of Private Equity and Capital Solutions, CDPQ.

“We are pleased to partner with Constellation and CDPQ to acquire Ohio National, an established and diversified insurance carrier with a nation-wide footprint. Ontario Teachers’ brings our deep expertise in investing in the insurance sector to bear in backing Anurag to grow the Constellation platform,” said Karen Frank, Senior Managing Director, Equities at Ontario Teachers’.

The transaction is subject to customary conditions, including regulatory approvals, the approval of the Ohio Director of Insurance and ONMH’s member approval.

Debevoise & Plimpton LLP is serving as legal counsel to Constellation in the transaction.

ABOUT CONSTELLATION
Constellation is an insurance holding company targeting acquisitions of life and P&C insurers based in North America, with the strategic intent of building a substantial, highly rated and conservatively managed multi-line insurance business backed by long-term institutional capital. Constellation’s founding investors and equal partners, CDPQ and Ontario Teachers’, are two of the largest long-term institutional investors in North America, managing a total of over CA$500 billion in net assets, including over CA$80 billion in private capital investments.