Antarctica Capital to Acquire Annuity Issuer for $100M
The asset manager says it wants to see Midwest Holding continue to grow.
Another asset manager wants in on the U.S. annuity game.
Antarctica Capital has agreed to acquire Midwest Holding for $100 million in cash, and it says it plans to keep the company’s management, employees, offices and operations in place.
Chandra Patel, Antarctica Capital’s managing partner, said the firm intends to “accelerate Midwest’s ‘capital light strategy’ to drive future growth.”
What It Means
Investors in the public stock market have been squinting at life insurers suspiciously since the banks began having their problems, but investors in the private equity sector seem friendlier.
Continued asset manager interest in annuities could help increase the supply of annuities and hold the price down.
The Players
Antarctica Capital was founded in 2010 and has offices in New York.
It has $1.2 billion in assets under management
One of its best known affiliates is EarthDaily Analytics Corp., a company that launches and manages satellites.
The firm started Weddell Re, a reinsurer based in Barbados, in 2016.
Patel, the managing partner, has a bachelor’s degree from the University of Kansas, a master’s degree from the London School of Economics and a law degree from Boston College.
Midwest Holding is Lincoln, Nebraska-based life insurer with stock that has been trading on Nasdaq.
The company reported $5.8 million in net income for the first quarter on $38 million in revenue, compared with $1.2 million in net income on $2.6 million in revenue for the first quarter of 2022.
The company aims to write annuities and share much or all of the guarantee risk with reinsurers or other parties.
The company generated $195 million in annuity sales during the quarter, up from $98 million in sales in the year-earlier quarter. About 69% of the new premiums came from sales of multi-year guaranteed annuity contracts and the rest from sales of non-variable indexed annuities.
The Deal
The acquisition has been approved by the Midwest board.
Antarctica Capital’s deal price amounts to $27 per Midwest share. Shares had been selling for about $15 per share before the acquisition announcement.
The transaction is subject to Midwest shareholder approval, but holders of 33% of Midwest’s stock have already agreed to vote their shares in favor of the transaction, Midwest said.
The deal also must be approved by state insurance regulators and other regulators.
Antarctica Capital hopes to get the regulatory approvals needed to close on the deal sometime between July 1 and the end of the year.
Georgette Nicholas, Midwest’s CEO, said the company’s board “conducted a comprehensive review” of opportunities to increase the company’s value.
“We are confident this transaction provides a highly attractive outcome for Midwest,” she said.
Pictured: Georgette Nicholas. (Photo: Genworth)