Capital Raise Case Study
Client: Private Equity Backed Life & Health Insurance Company
Objective: Identify a middle market Long Term Care Insurance company where our client could introduce a new LTC product to an existing customer base. Acquisition target needed to be operational, with a nationwide base of policyholders and a standalone AM Best Rating.
Our Process: Led by a senior advisor, Merger & Acquisition Services undertook the following initiatives:
- Identified Long Term Care companies, which were not part of a large insurance group, rated by AM Best with a book of existing policyholders
- Worked one on one with the client to narrow down identified potential targets that met their acquisition guidelines
- Merger & Acquisition Services contacted selected “targets” on a no name basis to assess the willingness of these companies to entertain an acquisition
- From our initial work, the client identified one company, which included a smaller subsidiary which fit the acquisition parameters perfectly
- Initiated the due diligence process by requesting and sourcing the necessary data on the “target” company
- Worked with the client to review the diligence materials
- Developed a valuation model with the client to facilitate the preparation of the Letter of Intent
- The client needed to raise additional money to support the acquisition of the target due to changes in the marketplace. Merger & Acquisitoin Services worked with the client and introduced them to a capital provider who assisted in funding the transaction with over $20MM of debt capital
- Assisted in negotiating the final terms of the deal; resulting in the execution of a purchase agreement
Result: Client received over $20MM of debt capital, closed on the insurance company and its subsidiary, allowing them to expand their LTC product on rated paper to an existing customer base on a nationwide basis.