Canadian P&C insurer reveals plan to go private

The Insurance coverage Firm of Prince Edward Island (ICPEI) has proposed deal that might have firm administrators, executives, sure staff and buyers purchase a majority stake within the insurance coverage firm and take its possession personal.

The proposed deal was introduced Friday by ICPEI Holdings Inc., which operates in Canada’s P&C insurance coverage trade by its wholly owned subsidiary, ICPEI. The insurer gives business and private strains of insurance coverage merchandise completely by the dealer channel.

ICPEI reported a 2021 underwriting revenue of roughly $8.5 million based mostly on $66.7 million direct premiums written for a market share of 0.09% (based mostly on internet premiums written), in line with MSA Analysis stats revealed within the 2022 Canadian Underwriter Stats Information.

The corporate expects to carry a particular assembly to contemplate and vote on the proposed deal in February 2023. If accepted on the assembly, the transaction is predicted to shut in 2023 Q1, topic to court docket approval and different customary closing circumstances.

Beneath the proposed deal, a consortium together with key members of the corporate’s government administration group and sure different firm staff and shareholders will not directly purchase the entire firm’s issued and excellent frequent shares for $4 per share, the corporate introduced Friday.

Desjardins Normal Insurance coverage Group Inc. can be member of the consortium, as are sure different unnamed firm buyers. The deal would work out to a a number of of two.1 occasions the price-to-book worth, as of the corporate’s September 2022 steadiness sheet.

When the smoke clears, ICPEI could be privately owned by a 66% majority of the corporate’s government administrators, managers and sure staff. This group of shareholders would come with, amongst others, president and CEO Serge Lavoie, board chairman Murray Wallace, firm director Robert Ghiz, CFO Teddy Chien and normal counsel Ken Coulson.

At the moment, the corporate’s administrators, executives and staff personal roughly 33.1% of the corporate’s shares.

If the deal is accepted, Desjardins would maintain an oblique curiosity in 27.5% of the corporate, whereas unnamed buyers are anticipated to personal as a bunch (straight and not directly) the steadiness of roughly 6.4% of the corporate.

A particular committee comprised of Sharon Ranson and James Falle was established to contemplate the deal. Origin Service provider Companions acted as monetary advisor to the particular committee.

“After cautious deliberation, the particular committee considers that the transaction represents one of the best accessible path ahead for the corporate and its shareholders,” mentioned Ranson, director and co-chair of the particular committee of impartial administrators. “The transaction will present shareholders, apart from the rollover shareholders [i.e. the executive and employee group in the consortium], with speedy and sure money worth, whereas offering the corporate with further flexibility to function as a personal firm within the arms of a dedicated long-term investor.”

The proposed deal follows a statutory plan of association below the Ontario’s Enterprise Companies Act.

Characteristic picture courtesy of iStock.com/gorodenkoff