LAS VEGAS and DES MOINES, Iowa, May
24, 2017 /PRNewswire/ -- CF Corporation (NASDAQ: CFCO) ("CF Corp."), and Fidelity & Guaranty Life (NYSE:
FGL) ("FGL"), a leading provider of fixed indexed annuities and life insurance in the U.S., today announced that their boards of
directors have each unanimously approved a definitive merger agreement under which CF Corp. will acquire FGL for $31.10 per share in cash, or a total of approximately $1.835 billion, plus the
assumption of $405 million of existing debt. The purchase consideration implies a value of 1.1x
adjusted book value[1] as of March 31, 2017. The investor group, which includes the founders of CF
Corp., Chinh E. Chu, and William P. Foley, II, funds affiliated
with Blackstone (NYSE: BX), and Fidelity National Financial (NYSE: FNF) ("FNF"), will invest approximately $900 million in common and preferred equity to fund the transaction.
FGL is a leading provider of fixed indexed annuities and life insurance products, with approximately $28 billion of GAAP Total Assets and approximately $1.6 billion of adjusted book
value1. FGL has grown sales by approximately 10% annually from 2012 to 2016, supported by its long-standing
relationships with distribution partners, changing U.S. retirement demographics, and an attractive product value proposition to
policyholders.
Following the close of the transaction, FGL will continue to be led by its current management team under Chris Littlefield as President and CEO. FGL will remain headquartered in Des Moines,
Iowa, and will continue operations from Baltimore, Maryland, and Lincoln, Nebraska. Messrs. Chu and Foley will serve as Executive Chairmen of the Board, which will be
composed of a majority of independent directors.
Mr. Foley said, "This is an exciting transaction that we expect will enable us to generate attractive returns for our
shareholders by accelerating FGL's growth and profitability through efficient structuring and improved investment management
capabilities. I look forward to working closely with Chris and the entire management team to help advance FGL's strategy while
continuing to provide industry-leading retirement savings products to policyholders."
Mr. Chu noted, "FGL is a very high-quality business with attractive demographic tailwinds. We look forward to working with
management to continue to build a premier insurance platform and accelerate value creation for shareholders. CF Corp. is an ideal
platform for FGL given our permanent capital and blue chip long-term investor base. This transaction is transformative and the
combination of CF Corp., Blackstone and FNF will add tremendous value to FGL."
Mr. Littlefield added, "This agreement with CF Corp. is a terrific conclusion to our strategic review process. This
transaction delivers compelling value to our existing shareholders and ideally positions FGL for our next phase of growth. We
believe the expertise and insights that our leading investors will bring as new shareholders of FGL will greatly benefit the
company, our policy owners, distribution partners, agents and employees. We see a very bright future for FGL."
Key Transaction Terms and Details
The transaction will be financed with $1.2 billion from CF Corp.'s IPO and forward purchase
agreements, and more than $700 million in additional new common and preferred equity. Funds advised
by Blackstone Tactical Opportunities, funds advised by GSO Capital Partners LP (the credit division of Blackstone) and FNF have
provided a full backstop funding commitment to ensure certainty of funding.
FGL will enter into an investment management agreement with affiliates of Blackstone. This agreement will provide access to
Blackstone's superior investment management and strategic oversight capabilities to drive additional value creation for FGL and
policyholders, while continuing FGL's current focus on high-quality investment grade assets under the current FGL investment
team. Messrs. Chu and Foley will be involved and will lend their expertise to the asset management function led by
Blackstone.
In connection with the transaction, CF Corp. and HRG Group, Inc. (NYSE: HRG) ("HRG"), a diversified holding company and FGL's
largest shareholder, have approved a purchase agreement under which CF Corp. will acquire certain reinsurance companies from
HRG.
Timeframe to Completion
The transaction is expected to close in the fourth quarter of 2017, subject to the approval of the shareholders of CF Corp.
and FGL, and receipt of required regulatory approvals and other customary closing conditions. Certain investors that own
approximately 18% of CF Corp.'s common shares have entered into voting agreements to support the transaction. In addition,
following the execution of the merger agreement, HRG, in its capacity as the majority shareholder of FGL, delivered to CF Corp. a
written consent approving and adopting the merger agreement.
Advisors
Bank of America Merrill Lynch and FT Partners are acting as financial advisors to CF Corp., Citigroup is acting as a capital
markets advisor and Winston & Strawn LLP, Hogan Lovells US LLP and Debevoise & Plimpton LLP are acting as legal
advisors.
Lazard is acting as financial advisor to Blackstone and Debevoise & Plimpton LLP is acting as legal advisor. Sullivan
& Cromwell LLP is acting as legal advisor to GSO Capital Partners LP.
Credit Suisse is acting as lead financial advisor to FGL and Jefferies is acting as co-financial advisor to FGL. Rothschild is
acting as additional financial advisor to FGL. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to
FGL.
Transaction Website
A website with additional information on the transaction can be found here: www.cfcorpandfidelity.com.
About CF Corporation
CF Corporation's primary objective is to build an enduring, high quality business by using permanent capital, a core tenet of
the CF Corp. structure. CF Corp. also has the largest individual founder co-investment in a U.S. special purpose acquisition
company, which results in alignment of interests with CF Corp.'s investors.
About Fidelity & Guaranty Life
Fidelity & Guaranty Life, an insurance holding company, helps middle-income Americans prepare for retirement. Through its
subsidiaries, the company offers fixed annuity and life insurance products distributed by independent agents through an
established network of independent marketing organizations. Fidelity & Guaranty Life is headquartered in Des Moines, Iowa and trades on the New York Stock Exchange under the ticker symbol FGL. For more
information, please visit www.fglife.com.
About Blackstone
Blackstone is one of the world's leading investment firms. We seek to create positive economic impact and long-term value for
our investors, the companies we invest in, and the communities in which we work. We do this by using extraordinary people and
flexible capital to help companies solve problems. Our asset management businesses, with over $360
billion in assets under management, include investment vehicles focused on private equity, real estate, public debt and
equity, non-investment grade credit, real assets and secondary funds, all on a global basis. Further information is available
at www.blackstone.com. Follow Blackstone on
Twitter @Blackstone.
Forward-Looking Statements
This press release contains, and certain oral statements made by representatives of CF Corp. and FGL, and their respective
affiliates, from time to time may contain, "forward-looking statements" within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. CF Corp.'s and FGL's actual results may differ from their expectations,
estimates and projections and consequently, you should not rely on these forward looking statements as predictions of future
events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will,"
"could," "should," "believes," "predicts," "potential," "might" and "continues," and similar expressions are intended to identify
such forward-looking statements. These forward-looking statements include, without limitation, CF Corp.'s and FGL's expectations
with respect to future performance and anticipated financial impacts of the business combination, the satisfaction of the closing
conditions to the business combination and the timing of the completion of the business combination. These forward-looking
statements involve significant risks and uncertainties that could cause actual results to differ materially from expected
results. Most of these factors are outside CF Corp.'s and FGL's control and are difficult to predict. Factors that may cause such
differences include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise
to the termination of the merger agreement relating to the proposed business combination; (2) the outcome of any legal
proceedings that may be instituted against CF Corp. or FGL following the announcement of the merger agreement and the
transactions contemplated therein; (3) the inability to complete the business combination, including due to failure to obtain
approval of the shareholders of CF Corp. or other conditions to closing in the merger agreement; (4) delays in obtaining or the
inability to obtain necessary regulatory approvals (including approval from insurance regulators) required to complete the
transactions contemplated by the merger agreement; (5) the occurrence of any event, change or other circumstance that could give
rise to the termination of the merger agreement or could otherwise cause the transaction to fail to close; (6) the inability to
obtain or maintain the listing of the post-acquisition company's ordinary shares on NASDAQ following the business combination;
(7) the risk that the business combination disrupts current plans and operations as a result of the announcement and consummation
of the business combination; (8) the ability to recognize the anticipated benefits of the business combination, which may be
affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably and retain
its key employees; (9) costs related to the business combination; (10) changes in applicable laws or regulations; (11) the
possibility that FGL or the combined company may be adversely affected by other economic, business, and/or competitive factors;
and (12) other risks and uncertainties identified in CF Corp.'s proxy statement relating to the business combination, including
those under "Risk Factors" therein, and in CF Corp.'s and FGL's other filings with the Securities and Exchange Commission
("SEC"). CF Corp. and FGL caution that the foregoing list of factors is not exclusive. CF Corp. and FGL caution readers not to
place undue reliance upon any forward-looking statements, which speak only as of the date made. CF Corp. and FGL do not undertake
or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect
any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, subject
to applicable law. The information contained in any website referenced herein is not, and shall not be deemed to be, part of or
incorporated into this press release.
No Offer or Solicitation
This press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an
offer to buy any securities pursuant to the proposed transactions or otherwise, nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
No Assurances
There can be no assurance that the proposed business combination will be completed, nor can there be any assurance, if the
business combination is completed, that the potential benefits of combining the companies will be realized. The description of
the business combination contained herein is only a summary and is qualified in its entirety by reference to the definitive
agreements relating to the business combination, copies of which will be filed by CF Corp. with the SEC as an exhibit to a
Current Report on Form 8-K.
Important Information For Investors and Shareholders
In connection with the proposed business combination, CF Corp. intends to file a preliminary proxy statement and a definitive
proxy statement with the United States Securities and Exchange Commission ("SEC"). CF Corp.'s shareholders and other interested
persons are advised to read, when available, the preliminary proxy statement and the amendments thereto and the definitive proxy
statement and documents incorporated by reference therein as these materials will contain important information about FGL, CF
Corp. and the business combination. When available, the definitive proxy statement and other relevant materials will be mailed to
shareholders of CF Corp. as of a record date to be established for voting on the business combination. Shareholders will also be
able to obtain copies of the preliminary proxy statement, the definitive proxy statement and other documents filed with the SEC
that will be incorporated by reference therein, without charge, once available, at the SEC's web site at www.sec.gov, or by directing a request to: CF Corporation, 1701 Village Center Circle,
Las Vegas, Nevada 89134, Attention: Douglas B. Newton, Chief
Financial Officer (212) 355-5515 or by accessing CF Corp.'s website at www.cfcorpandfidelity.com.
Participants in the Solicitation
CF Corp. and its directors and executive officers may be deemed participants in the solicitation of proxies from CF Corp.'s
shareholders with respect to the business combination. A list of the names of those directors and executive officers and a
description of their interests in CF Corp. is contained in CF Corp.'s annual report on Form 10-K for the fiscal year ended
December 31, 2016, which was filed with the SEC and is available free of charge at the SEC's web
site at www.sec.gov, or by directing a request to CF Corporation, 1701 Village
Center Circle, Las Vegas, Nevada 89134, Attention: Douglas B.
Newton, Chief Financial Officer (212) 355-5515. Additional information regarding the interests of such participants will
be contained in the proxy statement for the business combination when available.
FGL and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the
shareholders of CF Corp. in connection with the business combination. A list of the names of such directors and executive
officers and information regarding their interests in the business combination will be included in the proxy statement for the
business combination when available.
CF Corporation Contacts:
Douglas B. Newton, Chief Financial Officer
CF Corporation
212-355-5515
Jonathan Keehner / Andi Rose / Julie
Oakes
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
FGL Contacts:
Investors:
Lisa Foxworthy-Parker
Fidelity & Guaranty Life
Investor.Relations@fglife.com
515-330-3307
Media:
Jamie Tully / David Millar
Sard Verbinnen & Co
212-687-8080
Blackstone Contact:
Matt Anderson
212-390-2472
[1] Based on GAAP Equity excluding Accumulated Other Comprehensive Income (as of 3/31/17)
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SOURCE CF Corporation