iA, a unit of Canadian insurance company iA Financial Group, has concluded the acquisition of Vericity in an all-cash transaction valued at $170m (C$233.09m).
The acquired company, based in the US, provides D2C life insurance solutions.
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Backed by private investment company JC Flowers & Co, Vericity operates through its subsidiaries Fidelity Life Association and eFinancial and has a team of more than 400.
It aims to offer “affordable” and accessible life insurance solutions to middle-market consumers through digital sales, swift policy issuance and a focus on non-medically underwritten products at the point of sale.
The definitive merger agreement signed in October 2023 led to iA acquiring all issued and outstanding common stock of Vericity at $11.43 per share.
This purchase price marked a 101% premium over Vericity’s closing share price of $5.7 on the last trading day before the announcement (2 October 2023).
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By GlobalDataFor iA, the deal aims to enhance its position in the mid-market life insurance segment by integrating an insurance carrier and a digital agency.
iA Financial Group executive vice-president and chief growth officer of US operations Sean O’Brien said: “For several years now, iA Financial Group has enjoyed strong growth in its individual life insurance business in the United States.
“This acquisition will enable us to continue this strong growth, increase the size of our operations in this field south of the border, and give us access to a digital distribution platform. Synergies are to be expected, in particular due to Vericity’s distribution capacities with direct access to consumers.”
With the conclusion of the deal, Vericity has now ceased trading on the Nasdaq Capital Market.
Vericity CEO James Hohmann said: “This milestone marks the start of a new chapter for Vericity and we are proud to join the iA family. Combining our teams and resources unlocks exciting new opportunities to extend the capabilities of Fidelity Life and eFinancial to make life insurance more accessible and affordable for everyday Americans.
“We also see abundant possibilities ahead for our employees who will play a pivotal role in charting and achieving our future growth potential.”
