A Dutch financial services company has agreed to scoop up a major player in the U.S. executive benefits market.
AEGON N.V., The Hague, Netherlands, say it plans to pay $293 million, or $16.55 per share, in cash for Clark Inc., Barrington, Ill.
The price of Clark’s shares closed today at $12.50.
AEGON already owns 13% of Clark’s stock through an affiliate, AUSA Holdings Inc. AUSA has been paying Clark $2.5 million per year under an administrative services and bonus forfeiture agreement, according to reports Clark has filed with the U.S. Securities and Exchange Commission.
Clark, founded in 1967, is best known for units that sell corporate-owned life insurance, bank-owned life insurance and a variety of executive compensation arrangements.
AEGON hopes acquiring Clark will help it expand distribution for its COLI and BOLI products, the company says.
Clark also has acquired many other boutique operations over the years, such as a lobbying operation in Washington.
A Clark management group plans to buy the lobbying operation and several divisions, such as the Pearl Meyer & Partners executive compensation consulting firm, the Medex wholesale stop-loss provider, and the company’s Clark Benson and Baden financial and estate planning subsidiary, AEGON says.
Clark paid $11 million for the lobbying firm, $26 million for Pearl Meyer, $8.6 million for Medex and $8 million for Baden Retirement Plan Services, according to Clark deal announcements.
Investment experts have criticized management buyouts in recent months, contending that managers often shaft shareholders by paying unreasonably low prices.
AEGON plans to see how much outside buyers will pay for the Clark business divisions it does not want before letting the management group buy them, AEGON says.
Clark also has the right to see if any suitors will pay more than AEGON for Clark’s core operations, AEGON says.