Private equity-backed Nassau Reinsurance Group Holdings LP is buying life insurance business the Phoenix Cos. Inc. (NYSE: PNX) for $217.2 million.
Aside from life insurance, Hartford, Connecticut-based Phoenix provides income strategies and insurance protection related to retirement.
The purchase price works out to $37.50 per share, well over Phoenix's closing share price of $13.03 on Sept. 28, before the deal was announced. After the deal closes (expected in early 2016), Nassau plans to inject $100 million in new equity into Phoenix to stabilize and improve the company's balance sheet, as well as provide growth capital.
Nassau, headquartered in New York, is an insurance and reinsurance business backed by San Francisco private equity firm Golden Gate Capital. The company focuses on acquiring and operating life, annuity, and long-term care insurance businesses.
Golden Gate has more than $15 billion in committed capital, and invested in Nassau in May. The PE firm made the commitment through its Golden Gate Capital Opportunity Fund, which provides equity seed capital of up to $750 million. This is Nassau's first acquisition.
Sandler O'Neill & Partners LP and Goldman Sachs & Co. (NYSE: GS) are acting as Phoenix's financial adviser, while Simpson Thacher & Bartlett LLP provides legal advice. Macquarie Capital (USA) Inc. is Nassau's financial adviser, and Debevoise & Plimpton LLP is legal counsel.
Insurance M&A has been constant for years. Recent transactions include Confie Seguros' acquisition of three more insurance agencies, and ExorSpA's deal for Partner RE Ltd. For more on M&A activity in the insurance sector, see Insurance Firms Find Bigger May Be Better.