Golden Gate Capital-backed Nassau Reinsurance Group Holdings LP has agreed to acquire The Phoenix Companies Inc for $217.2 million or $37.50 per share in cash. Sandler O’Neill + Partners LP and Goldman Sachs are providing financial advice to Phoenix on the transaction while Macquarie Capital (USA) Inc is doing likewise for Nassau. Based in Hartford, Connecticut, Phoenix is a financial solutions provider for families and individuals planning for or living in retirement.
NEW YORK & HARTFORD, Conn–(BUSINESS WIRE)–Nassau Reinsurance Group Holdings L.P. (“Nassau”) and The Phoenix Companies, Inc. (NYSE:PNX) (“Phoenix”) today announced that they have entered into a definitive agreement in which Nassau will acquire Phoenix for $37.50 per share in cash, or aggregate equity purchase price of $217.2 million. The purchase price represents a 188% premium over Phoenix’s closing stock price of $13.03 on Sept. 28, 2015.
After completion of the transaction, which is expected to occur by early 2016, Nassau will contribute $100 million in new equity capital into Phoenix to further stabilize and improve Phoenix’s balance sheet as well as providing growth capital. As of June 30, 2015, Phoenix had GAAP equity including AOCI of $199.2 million, GAAP equity excluding AOCI of $464.4 million, and total statutory surplus (including AVR) of $817.3 million.
After completion of the transaction, Phoenix will be a privately held, wholly owned subsidiary of Nassau. Phoenix’s corporate headquarters will remain in Hartford, Conn., and its service center will continue to be located in East Greenbush, N.Y.
Phoenix’s retail bonds (NYSE: PFX) will remain outstanding and, in connection with the transaction, Phoenix will solicit its bondholders to amend the indenture to replace its public filing obligations with reporting obligations more appropriate for a privately held company.
Nassau was launched in April 2015 and is an insurance and reinsurance business founded by insurance industry executives Phillip J. Gass and Kostas Cheliotis. Nassau is backed by Golden Gate Capital, a private investment firm founded in 2000 with more than $15 billion of committed capital.
After considering various strategic alternatives, Phoenix’s Board of Directors initiated a thorough process and, in conjunction with our financial and legal advisors, determined a transaction with Nassau was in the best interests of Phoenix and our shareholders,” said James D. Wehr, Phoenix’s president and chief executive officer. “The transaction provides a significant premium to Phoenix shareholders, and the additional capital provided by Nassau will make Phoenix and its subsidiaries financially stronger and well-positioned for the long term, to the benefit of policyholders and other key constituents. We look forward to working closely with Nassau to close this transaction. Nassau’s founders bring substantial resources and proven experience managing insurance companies and are committed to maintaining our 164-year legacy of meeting customers’ financial needs.”
Phillip J. Gass, Nassau’s chairman and chief executive officer, said: “This transaction marks Nassau’s first life insurance acquisition, which will become our U.S. life and annuity platform for future growth. Taking Phoenix private, in conjunction with the additional $100 million in new equity capital, will accelerate the company’s turnaround, bolster its financial strength and ratings, and benefit policyholders and distribution partners. We are also very excited to support the continued growth of Saybrus, which Phoenix has done a great job building into a uniquely competitive life and annuity distribution business.”
The transaction is subject to approval by Phoenix shareholders, approvals by regulatory authorities including Connecticut and New York insurance regulators, FINRA and Hart-Scott-Rodino, as well as other closing conditions. Phoenix and Nassau engaged in discussions with state insurance regulators regarding the proposed transaction in advance of executing the agreement.
Sandler O’Neill + Partners, L.P. and Goldman, Sachs & Co. are acting as financial advisors to Phoenix, and Simpson Thacher & Bartlett LLP is acting as legal advisor. Macquarie Capital (USA) Inc. is acting as financial advisor to Nassau, and Debevoise & Plimpton LLP is acting as legal advisor.
The Phoenix Companies, Inc. (NYSE:PNX) helps financial professionals provide solutions, including income strategies and insurance protection, to families and individuals planning for or living in retirement. Founded as a life insurance company in 1851, Phoenix offers products and services designed to meet financial needs in the middle income and mass affluent markets. Phoenix is headquartered in Hartford, Connecticut, and has two insurance company operating subsidiaries: Phoenix Life Insurance Company, which has its statutory home office in East Greenbush, New York, and PHL Variable Insurance Company, which has its statutory home office in Hartford, Connecticut. For additional information, visit www.phoenixwm.com.
Saybrus Partners, Inc., a subsidiary of Phoenix, offers solutions-based sales support to financial professionals and represents Phoenix’s products among key distributors, including independent marketing organizations and brokerage general agencies. Saybrus Partners helps financial professionals address clients’ needs with insurance solutions for basic protection as well as income, estate, and business planning. Its partner firms include institutional financial advisories, insurance retailers and broker/dealers. With customized services to best fit its partners’ businesses, its capabilities range from traditional wholesaling to consultation with client meeting support. Saybrus Partners’ corporate headquarters is in Hartford, Connecticut and its consulting representatives are located across the United States. For additional information, visit www.saybruspartners.com.
Founded in 2015, Nassau Reinsurance Group is an insurance and reinsurance business focused on acquiring and operating onshore and offshore platforms with long tail liabilities in the life, annuity and long term care sectors. Founded by insurance industry executives Phillip J. Gass and Kostas Cheliotis, Nassau Reinsurance Group has received an equity capital commitment of $750 million from Golden Gate Capital, a private investment firm with over $15 billion of committed capital. With extensive experience both on Wall Street and as investor-operators of onshore and offshore insurance, reinsurance and asset management businesses, Nassau Reinsurance Group is uniquely positioned to build and grow businesses with a long term view. For additional information, visit www.nsre.com.