Primerica (PRI) Reports Acquisition of e-TeleQuote
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Primerica, Inc. (NYSE: PRI), a leading provider of financial services to middle-income families throughout the United States and Canada, and Etelequote Limited, a senior health insurance distributor of Medicare-related insurance policies, announced today that they have signed a definitive agreement under which Primerica will acquire 80% of Etelequote Limited’s operating subsidiaries (collectively, “e-TeleQuote”) at an enterprise value of $600 million. Under the terms of the agreement, Primerica will purchase the remaining 20% stake over a period of up to four years. The companies also signed a distribution agreement for Primerica’s U.S. sales force to refer Medicare Advantage and Medicare Supplement sales to e-TeleQuote. The transaction is expected to close in July 2021.
“This acquisition will combine the strengths of two successful companies, positioning both for expanded growth,” said Glenn Williams, Primerica Chief Executive Officer. “The synergies between the client relationships of our sales force and e-TeleQuote’s expertise in senior health insurance plans are a major factor in our decision to enter this space. e-TeleQuote’s specialized technology platform and dynamic sales centers align perfectly with Primerica’s powerful distribution capabilities, allowing us to deliver additional value to our clients, sales representatives, employees, and stockholders.”
Williams continued: “This announcement is the culmination of several years of work by our strategy and leadership teams and furthers our long-term strategic plan. e-TeleQuote is the right size acquisition for us in an adjacent, high-growth sector. We look forward to welcoming the e-TeleQuote team to the Primerica family and working together to expand our positive impact on the financial lives of middle-market clients of all ages.”
Headquartered in Clearwater, FL, e-TeleQuote is an innovative, fast growing business in the senior health insurance distribution space with a broad geographic reach into all 50 U.S. states and Puerto Rico. Led by strong entrepreneurial management, the 10-year-old company is well-positioned to expand its role as a distributor of Medicare-related plans, which help seniors defray medical expenses and provide peace of mind.
One of e-TeleQuote’s core strengths is the breadth of its carrier relationships. e-TeleQuote offers products from a wide array of carriers (including United Healthcare, Humana, and Anthem) with over 2,700 Medicare Advantage plans available. e-TeleQuote also has a growing Medicare supplement business with 4 carriers. This breadth aligns well with Primerica’s distribution footprint and will enable Primerica to serve the financial needs of clients more fully throughout their lifecycle. Consumers may obtain information on available plans through e-TeleQuote agents or its consumer facing website www.easymedicare.com.
“We are excited about the many opportunities that present themselves through the combination of our two organizations,” said Anthony P. Solazzo, CEO and Founder of e-TeleQuote. “We believe that e-TeleQuote’s carrier agnostic approach to helping Medicare beneficiaries find solutions to their healthcare needs, as well as our other core values, align perfectly with Primerica. Both organizations are dedicated to serving constituents who have long been underserved and do so through an educational approach that meets the needs of consumers. It is the similar commitment to consumers, employees, and our communities that makes this a mutually beneficial arrangement.”
Under the terms of the share purchase agreement, Primerica will acquire 80% of e-TeleQuote at a $600 million enterprise value and a $450 million implied equity value based on an estimated $150 million in net debt at closing. Primerica will fund the transaction – which includes the 80% equity stake for $360 million as well as replacing e-TeleQuote’s existing debt with lower cost funding provided by Primerica – with $370 million in cash, a $125 million draw on its revolving credit facility, and a $15 million seller’s note. e-TeleQuote’s stockholders will have a potential earnout of up to $50 million payable in cash if specified financial targets are achieved in 2021 and 2022.
Specifically, Primerica will acquire 70.25% of e-TeleQuote from The Resource Group International, Limited, representing its entire ownership stake, and 9.75% of e-TeleQuote from e-TeleQuote management. Following the closing, the remaining stake will be held by e-TeleQuote’s management. Structural components such as the potential earnout, call and put options and a new management incentive plan are expected to incentivize and encourage retention of key members of the e-TeleQuote team. The call and put options will be exercisable over up to a four-year period. The transaction is expected to be immediately accretive to Primerica’s earnings.
As a result of this announcement, Primerica has suspended stock buybacks through the remainder of 2021 but expects to resume repurchases in 2022.
Primerica’s acquisition of e-TeleQuote is a natural extension of its strategy to distinguish itself as the leading distributor of financial services products to meet middle-income families’ evolving needs. With a product portfolio that provides a solid foundation for financial security – term life insurance, annuities, IRAs, managed investment accounts, mortgage lending, pre-paid legal services, and the coming addition of senior health insurance plans – Primerica is positioning itself to become an even more important part of the financial lives of the overlooked middle-income market. Senior health insurance plans play a critical role in bridging the gap between Medicare and the healthcare expenses seniors often face after turning 65 years of age. Acquiring e-TeleQuote will support Primerica’s already formidable distribution capabilities, enhance Primerica’s earning streams, extend Primerica’s reach into new markets and create recruitment and referral opportunities for Primerica’s sales force.
Approvals and Timing
The transaction has been approved by both companies' boards of directors and is expected to close on July 1. The transaction is subject to regulatory and other customary closing conditions.
Goldman Sachs & Co. LLC served as financial advisor to Primerica and Sidley Austin LLP served as legal counsel to Primerica. J.P. Morgan Securities LLC served as financial advisor to e-TeleQuote, and Orrick, Herrington & Sutcliffe LLP served as legal counsel to e-TeleQuote.
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Create E-mail Alert Related CategoriesCorporate News, Management Comments, Mergers and Acquisitions
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