Luisa Beltran Jan. 7, 2020 5:32 pm ET
AmeriLife
Group, an insurance distributor, will find itself owned by a private-equity
firm for a third time.
Thomas
H. Lee Partners is leading an investor group to acquire AmeriLife through a
recapitalization, according to a
statement. Financial terms weren’t announced. J.C. Flowers, the
private-equity firm run by investor J. Christopher Flowers, is the seller. The
THL-led consortium includes Cannae Holdings and
certain THL limited partners. AmeriLife’s management also is investing. The
transaction is valued at over $1 billion, two people familiar with the deal
said.
Founded
in 1971, AmeriLife provides life, health, and financial-services products for
pre-retirees and retirees. The Clearwater, Fla., company, which employs about
800 people, has a national distribution network of more than 140,000 insurance
agents and advisors.
AmeriLife’s
products target individuals aged 55 and older. “There is a lot of strong growth
in that population for the foreseeable future with the aging of the baby
boomers,” said Ganesh Rao, a THL managing director. AmeriLife has completed
roughly 10 acquisitions since 2018, and it will to continue buying, he said.
“We see a very strong M&A opportunity,” Rao said.
The
sale to THL is the third time AmeriLife will be backed by a private-equity
firm. Reservoir Capital Group and Black Diamond Capital Partners acquired
AmeriLife in 2007. They sold it in
2015 to J.C. Flowers for less than $500 million, people said.
Flowers used its third fund, which collected $2.3 billion in 2008, to invest in
AmeriLife. The New York firm is expected to exit the company with the sale to
THL, people said.
“From
our perspective, the private-equity structure keeps us independent as opposed
to being owned by a strategic [buyer],” Scott R. Perry, AmeriLife’s CEO,
told Barron’s. “We serve the market in a neutral manner. As
long as the PE firm is supportive, is aligned with our strategy, and has
capital to support our future needs for growth, it’s an ideal partnership.”
The
deal is seen as a win for Flowers, which has already received some of its money
back. AmeriLife took out $395 million in new loans in June 2019. It used the
proceeds to refinance $234 million of debt as well as pay out a
dividend to its shareholders, including Flowers, Moody’s Investors
Service said. The company produces revenue in the high $200 million-low $300
million range, people said.
Flowers,
a former Goldman Sachs executive,
was considered one of the most successful investment bankers when he founded
the firm that bears his name in 1998. J.C. Flowers is a financial services
focused-firm that focuses in sectors including banking, insurance, and asset
management. The New York buyout shop is investing out of its fourth pool that
had collected about $628.1 million in December 2016, The Wall Street Journal reported at
the time.
AmeriLife,
which was advised by Evercore and Jefferies, ran a 10-week auction beginning in
the fall, people said. Credit Suisse and
Goldman Sachs advised THL. AmeriLife’s limited process mainly targeted private
equity. There are not many strategic buyers that can buy a life distribution
firm like AmeriLife, people said. This allows private-equity firms to be very
competitive for these types of companies, they said.
THL,
one of the oldest private-equity firms, will have a majority of AmeriLife,
people said. Founded in 1974, the Boston buyout shop has been a longtime
insurance investor, with transactions including Sedgwick, AXIS Capital, and
Allied World Assurance. THL is currently investing out of its eighth pool,
which closed on $3.59 billion in 2019, PitchBook said.
THL
turned to its longtime financial partner, Cannae, which is also investing in
AmeriLife. Cannae, a holding company, split off from Fidelity National Financial in
2017. AmeriLife is Cannae’s eighth deal with THL; other transactions include
Ceridian and Dun & Bradstreet.
A
spokesperson for Cannae could not immediately be reached for comment.
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