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Athene Invests in Transportation: Deals

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What You Need to Know

  • Athene is now in charge of about 192,900 cars and trucks.
  • Integrity Marketing will be the parent of Modern Insurance Marketing, which sells P&C lines as well as life and health products.
  • The Anthem-myNexus deal involves a system for automating authorizations for home health visits.

Athene Holding Ltd. — a life and annuity insurer and reinsurer — acquired a giant automobile and truck fleet company from Hertz Global Holdings Inc. Tuesday for $891 million in cash in its effort to diversify long-term investments.

Donlen Corp., the fleet manager, is a Bannockburn, Illinois-based business that owned an average of about 192,900 vehicles on any given day in 2020, according to the Hertz Form 10-K annual report for 2020.

Athene and Hertz first announced the Donlen deal in November 2020.

Jim Belardi, Athene’s CEO, said in a statement that Athene wants to invest in Donlen and help the current managers continue to improve and expand the vehicle fleet.

The Donlen deal fits with Athene’s strategy of ”sourcing attractive, differentiated, long-term investments that deliver strong and consistent returns,” Belardi said.

$27 Billion Deal With Jackson

Athene is a Hamilton, Bermuda-based company that ended 2020 with $203 billion in assets.

The company worked with Venerable to acquire a $19 billion block of fixed and indexed annuities from Voya Financial, through a reinsurance arrangement, in 2018.

The firm arranged to reinsure $27 billion in fixed deferred and non-variable indexed annuities for Jackson in June 2020.

Like other life insurers, Athene has faced the challenge of finding attractive investment opportunities at a time when the investment-grade corporate bonds life insurers traditionally prefer pay only about 1.2 percentage points more than comparable Treasury bonds.

Hertz Faces COVID-19

Hertz, the 102-year-old automobile rental giant based in Estero, Florida, sought protection from the U.S. Bankruptcy Court in Delaware in May 2020, after travel restrictions related to the COVID-19 pandemic slashed auto rental revenue.

Hertz recently arranged for a $4.2 billion cash infusion from affiliates of Cetares Opportunities LLC and Knighthead Capital Management LLC. The company is planning to emerge from the reorganization process in June as a publicly traded company, with about 80% of the shares owned by the holders of U.S. unsecured debt obligations.

Donlen Aspects

Donlen started up in 1965 and became one of the pioneers in the modern auto and truck leasing industry.

It offers many vehicle-related products and support services, such as lease financing, fuel management, accident management and toll management, in addition to providing the vehicles.

Hertz announced in September 2011 that it was acquiring Donlen for $177 million in cash and the assumption of $770 million in Donlen fleet debt.

Donlen produced $93 million in earnings before interest, taxes, depreciation and amortization in 2020 on $630 million in revenue, according to Hertz.

The company’s $1.8 billion asset total includes vehicles with a value of about $1.4 billion. The company has $1.3 billion in vehicle debt.

Other Deals

Integrity Marketing Group LLC has acquired Modern Insurance Market Inc.

Integrity Marketing is a Dallas-based insurance and annuity distributor that has grown rapidly through acquisitions. It expects to place enough new business this year to generate about $7 billion in new annual premiums.

Modern Insurance is Wilsonville, Oregon-based insurance marketing organization (IMO) that was founded in 1981.

Modern Insurance distributes Medicare plans, and it also distributes many other products, including life insurance, major medical insurance, employee benefits, and property and casualty products, such as auto insurance, homeowners insurance and workers’ compensation insurance.

Modern Insurance has relationships with about 20,000 customers, according to Integrity Marketing.

The companies are not saying how much Integrity Marketing is paying for Modern Insurance, but Integrity Marketing says it will make Greg Osborne, the president of Modern Insurance, one of its managing partners.

Anthem Inc. has agreed to acquire myNexus Inc.

Anthem is an Indianapolis-based health insurance giant. MyNexus is a Brentwood, Tennessee-based home health benefits manager.

MyNexus helps insurers and other payers support about 1.7 million Medicare Advantage plan members in 20 states, according to Anthem.

Anthem says one reason that it’s acquiring myNexus is that myNexus has a system for automating the insurance coverage authorization process for most home visits.

MyNexus also has about 250 home care specialists on its clinical staff, and it has a nationwide network of high-quality home health providers and nurse agencies, Anthem says.

Anthem is buying myNexus from WindRose Health Investors, an investment firm based in New York. Anthem hopes to close on the deal by June 30.

(Image: Sergey Nivens/Shutterstock)