Primerica Announces Agreement to Acquire e-TeleQuote - Seite 2

“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.”

Financial Terms

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.

Strategic Rationale

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.