- Complementary businesses and skills will create leading specialty
personal and commercial lines property underwriter focused on coastal
states
- Combination will have greater market presence, growth potential and
earnings power than the sum of the two companies separately
- Transaction expected to be immediately accretive to earnings per
share and ROE
- Combined entity will have over $1 billion of premium in force
ST. PETERSBURG, Fla.--(BUSINESS WIRE)--
United Insurance Holdings Corp. (NASDAQ: UIHC) (UPC Insurance or
the Company), a property and casualty insurance holding company,
announced today that it has entered into a Merger Agreement with RDX
Holding, LLC (RDX), the parent of American Coastal Insurance Company
(ACIC or American Coastal), to combine the companies in an all-stock
merger meant to qualify as a tax-free reorganization.
Under the terms of the transaction, RDX members will receive UPC
Insurance common stock based on an exchange ratio providing for RDX
members to own 49% of the outstanding UPC common stock as of the
signing. Dan Peed, who is the CEO of ACIC and owns a majority of the
stock of RDX, will become non-executive Vice-Chair of UPC’s Board of
Directors and will nominate two additional independent directors to join
the UPC Board, which will be expanded to ten as part of the transaction.
John Forney, UPC’s President and CEO, will assume the role of CEO of the
combined entity. The UPC stock issued to Mr. Peed as part of the
transaction will have certain voting and transfer restrictions designed
to demonstrate his long-term commitment to the combined entity and his
alignment of interest with other UPC shareholders.
“This is a transformational transaction for UPC, and the culmination of
many months of careful consideration of this opportunity to accelerate
UPC’s path to creating the premier provider of property insurance in
catastrophe-exposed areas,” said John Forney, President & CEO of UPC
Insurance. “ACIC has an enviable track record of delivering strong
earnings and very high returns on equity to its shareholders. Its
market-leading position in the Florida commercial residential market and
its exclusive MGA agreement with AmRisc provide UPC complementary skills
and new growth opportunities. Dan Peed has proven his ability to create
huge shareholder value, and we look forward to his vision and leadership
as part of the UPC Board.”
“I am excited to join the UPC Insurance team and believe this merger
will build on the excellent platform they have created, providing more
opportunities for growth and profit with our valued trading
partners,” said Dan Peed, CEO of American Coastal. “John Forney and his
team bring an extensive amount of energy and knowledge, and we share a
vision to create one of the strongest specialty cat underwriters in the
U.S.AmRisc is the largest cat commercial property MGA in the country
and will continue to underwrite on behalf of American Coastal Insurance
Company, bringing many opportunities for continued growth to American
Coastal, UPC Insurance and AmRisc.”
UPC Insurance is being advised in this transaction by Raymond James &
Associates and the law firm of Sidley Austin LLP. TigerRisk Capital
Markets & Advisory and Willis Capital Markets & Advisory are acting as
joint financial advisors and Debevoise & Plimpton LLP is serving as
legal counsel to RDX in connection with the transaction. The transaction
is subject to certain conditions, including approval by UPC Insurance’s
stockholders of the issuance of shares in the merger and receipt of
required regulatory approvals.
UPC Insurance will conduct a conference call to discuss the transaction
at 8:30 a.m. ET on Thursday, August 18, 2016. The Company invites
interested parties to participate in the conference call. To listen to
the live webcast, please go to http://upcinsurance.equisolvewebcast.com/transaction.
Additional information with respect to the transaction will be posted in
the investor relations section of the www.upcinsurance.com
website.
Conference Call Details
Thursday, August 18, 2016 – 8:30
a.m. ET
Participant Dial-In Numbers:
(United States):
877-407-8829
(International): 201-493-6724
About UPC Insurance
Founded in 1999, UPC Insurance is an insurance holding company that
sources, writes and services residential property and casualty insurance
policies using a network of independent agents and a group of wholly
owned insurance subsidiaries. UPC Insurance writes and services property
and casualty insurance in Connecticut, Florida, Georgia, Hawaii,
Louisiana, Massachusetts, New Jersey, New York, North Carolina, Rhode
Island, South Carolina and Texas, and is licensed to write in Alabama,
Delaware, Maryland, Mississippi, New Hampshire, and Virginia. From its
headquarters in St. Petersburg, UPC Insurance's team of dedicated
professionals manages a completely integrated insurance company,
including sales, underwriting, customer service and claims.
About ACIC
Founded in 2007, ACIC is a specialty underwriter focused primarily on
the commercial residential property insurance market in Florida. ACIC
has a long term exclusive agreement with AmRisc, LLC, the largest
commercial windstorm MGA in the United States, which serves as the sole
managing general agent to source and administer business for ACIC. In
2015, ACIC reported $308.5 million of direct premium written, $36.5
million in after-tax GAAP earnings, and finished the year with $195.8
million of tangible book value.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking statements” that involve
significant risks and uncertainties. All statements other than
statements of historical fact are statements that could be deemed
forward-looking statements, including: any statements regarding the
anticipated timing of filings and approvals relating to the proposed
merger; any statements regarding the expected timing of the completion
of the proposed merger; any statements regarding the ability to complete
the proposed merger considering the various closing conditions; any
statements of expectation or belief; any statement regarding the future
financial performance of the Company; and any statements of assumptions
underlying any of the foregoing.These statements are made as of
the date of this communication and reflect management’s expectations,
estimates and assumptions based on current and available information at
the time the document was prepared. Forward-looking statements often
include words such as “anticipate,” “believe,” “estimate,” “target,”
“expect,” “predict,” “plan,” “possible,” “potential,” “project,” “hope,”
“intend,” “likely,” “will,” “should,” “could,” “may,” “foreseeable,”
“would” and similar expressions.However, the absence of these
words or similar expressions does not mean that a statement is not
forward-looking. Readers are cautioned not to place undue reliance on
forward-looking statements.Forward-looking statements are not
guarantees of future performance and involve risks, uncertainties and
other factors that may cause actual performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by those statements.Risks and
uncertainties that could cause results to differ from expectations
include, but are not limited to: uncertainties as to the timing of the
proposed merger; the possibility that various closing conditions for the
proposed merger may not be satisfied or waived, including that the
stockholders of the Company may not approve the Company’s issuance of
common stock, par value $0.0001 per share, as consideration for the
proposed merger or that a governmental entity may prohibit, delay or
refuse to grant approval for the consummation of the proposed merger;
the effects of disruption from the proposed merger making it more
difficult for the Company to maintain relationships with employees
(including potential difficulties in employee retention); the response
of customers, vendors, other business partners and governmental entities
to the announcement of the proposed merger; legal proceedings that may
be instituted against the Company, its board of directors, executive
officers and others following the announcement of the definitive
agreement entered into in respect of the merger; other business effects,
including the effects of industrial, economic, political or weather
conditions outside of the Company’s control; transaction costs; actual
or contingent liabilities, including those related to dependence on key
commercial relationships or the expertise of certain personnel; and
other risks and uncertainties discussed in this communication and other
documents filed with the SEC by the Company, as well as the Schedule 14A
to be filed with the SEC by the Company. The Company does not undertake
any obligation to update any forward-looking statements as a result of
new information, future developments or otherwise, except as expressly
required by law.
Additional Information Regarding the Transaction and Where to Find
It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy the securities of the Company or the
solicitation of any vote or approval.This communication is being
made in respect of the proposed merger transaction involving the
Company, Kilimanjaro Corp., Kili LLC, AmCo Holding Company, RDX Holding,
LLC and certain members of RDX Holding, LLC. The proposed issuance by
the Company of shares of common stock in connection with such merger
will be submitted to the stockholders of the Company for their
consideration. In connection therewith, the Company intends to file
relevant materials with the SEC, including a definitive proxy statement.
However, such documents are not currently available. The definitive
proxy statement will be mailed to the stockholders of the Company.
BEFORE MAKING ANY VOTING OR ANY INVESTMENT DECISION, INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT
REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS
FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION. Investors and security holders may
obtain free copies of the definitive proxy statement, any amendments or
supplements thereto and other documents containing important information
about the Company, once such documents are filed with the SEC, through
the website maintained by the SEC at www.sec.gov.
Copies of the documents filed with the SEC by the Company will be
available free of charge on the Company’s website at www.upcinsurance.com
under the heading “Documents” within the “SEC Filings” section in the
“Investors Relations” portion of the Company’s website. Stockholders of
the Company may also obtain a free copy of the definitive proxy
statement and any filings with the SEC that are incorporated by
reference in the definitive proxy statement by contacting the Company’s
Investor Relations Department at [(727) 895-7737].
Participants in the Solicitation
The Company and its directors, executive officers and certain other
members of management and employees may be deemed to be participants in
the solicitation of proxies in connection with the proposed transaction.
Information about the directors and executive officers of the Company is
set forth in its proxy statement for its 2016 annual meeting of
stockholders, which was filed with the SEC on April 5, 2016, its annual
report on Form 10-K for the fiscal year ended December 31, 2015, which
was filed with the SEC on March 2, 2016, and in subsequent documents
filed with the SEC, each of which can be obtained free of charge from
the sources indicated above. Other information regarding the
participants in the proxy solicitation of the stockholders of the
Company and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the preliminary and
definitive proxy statements and other relevant materials to be filed
with the SEC when they become available.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160817006149/en/
United Insurance Holdings Corp.
John Rohloff, 727-895-7737
Director
of Financial Reporting
jrohloff@upcinsurance.com
or
Investor
Relations:
The Equity Group
Adam Prior, 212-836-9606
Senior
Vice-President
aprior@equityny.com
Source: United Insurance Holdings Corp.