HC2 Holdings Enters into Definitive Agreement to Sell Continental Insurance Business to an Affiliate of Michael Gorzynski for $90 Million

Transaction Underscores HC2’s Commitment to Streamlining Portfolio and Enhancing Capital Structure

NEW YORK, March 29, 2021 (GLOBE NEWSWIRE) -- HC2 Holdings, Inc. (“HC2” or the “Company”) (NYSE: HCHC) announced today that it has entered into a definitive agreement to sell its insurance segment, comprised of Continental Insurance Group Ltd. and its wholly-owned subsidiaries, Continental General Insurance Company and Continental LTC Inc. (collectively, “Continental”), to Continental General Holdings LLC (the “Buyer”), an entity controlled by Michael Gorzynski. Mr. Gorzynski, a director of the Company and beneficial owner of approximately 6.6% of the Company’s outstanding common stock, is the managing member of MG Capital Management, Ltd. and has also served as executive chairman of Continental since October 2020. The total transaction value of approximately $90 million consists of a combination of $65 million in cash plus securities, including certain assets of Continental.

The Company previously announced receipt of a non-binding indication of interest from the Buyer on December 10, 2020. HC2 intends to use the transaction proceeds for general corporate purposes.

“The sale of Continental will allow HC2 to focus on its three core operating segments – Infrastructure, Life Sciences and Spectrum,” said Avie Glazer, Chairman of HC2. “These are innovative businesses that reflect today’s new economy.”

“This transaction can help HC2 achieve key strategic objectives pertaining to portfolio optimization and balance sheet strength, while enabling Continental to accelerate the execution of its strategy,” added Mr. Gorzynski. “Continental is focused on developing an industry-leading servicing platform, diversifying into new lines of business and further capitalizing on market consolidation. I look forward to continuing to help build a Continental that is a valued true partner to all policyholders and stakeholders.”

“We are pleased to have reached an agreement with Mr. Gorzynski and look forward to consummating this transaction subject to receipt of required regulatory approvals,” added Wayne Barr, Jr., HC2’s President and CEO. “This represents a further opportunity to enhance our capital structure as we continue the strong momentum of change that has occurred at HC2 over the past several months.”

The transaction, which was unanimously approved by the Board of Directors of HC2, excluding Mr. Gorzynski and Kenneth Courtis (MG Capital’s other designee on the HC2 Board), who recused themselves from the deliberations, is subject to receipt of required regulatory approvals (including review and approval by the Texas Department of Insurance), receipt of other required consents and approvals and customary closing conditions. The transaction is expected to close in the third quarter of 2021.