CF Corp., through an acquisition company affiliated with Blackstone Group L.P. (BX) and Fidelity National Financial Inc. (FNF), offered $31.10 per share for Fidelity & Guaranty Life, the companies announced.
The deal is expected to shut in the fourth quarter this year and will be financed with $1.2 billion from CF Corp.’s IPO final year and with forward purchase agreements. The takeover requires CF Corp. to assume $450 million of Fidelity & Guaranty’s existing debt. Fidelity’s management team will remain intact, with Chris Littlefield continuing to serve as president and CEO. (See also: How Fidelity, T. Rowe Price Buy heated Stocks Ahead of IPOs.)
Credit Suisse is acting as lead financial advisor to FGL and Jefferies is acting as co-financial advisor to FGL.
Des Moines, Iowa-based Fidelity & Guaranty Life, which provides fixed index annuity and life insurance products, has approximately $28 billion in total assets and an adjusted book value of $1.6 billion. From 2012 to 2016, the company grew sales by approximately 10 percent each year amid changing retirement demographics in the U.S.
“FGL is a very high-quality commerce, trade with appealing demographic tailwinds,” CF Corp. co-founder Chinh E. Chu said in a statement. “We notice forward to working with management to continue to build a premier insurance platform and accelerate value creation for shareholders.”
Earlier this week, Fidelity National Financial announced it had acquired Hudson & Marshall, a full-service auction company, although the amount of the deal was not disclosed.
Fidelity & Guaranty Life shares are up 21.1 percent year to date, and up 15.5 percent the past year. CF Corp. shares are up 1.1 percent year to date, and up 4.5 percent since its IPO final final year. Both companies’ stocks were noting gains early in Wednesday’s session.