AmerUs Life Holdings Announces Agreement to Acquire AmVestors Financial Corp.DES MOINES Des Moines, city, United States Des Moines (dĭ moin`), city (1990 pop. 193,187), state capital and seat of Polk co., S central Iowa, at the junction of the Des Moines and Raccoon rivers; inc. , Iowa--(BUSINESS WIRE)--Sept. 22, 1997--AmerUs Life Holdings, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AMRS AMRS Alliance for Marine Remote Sensing AMRS Automated Merchant Shipping Reporting System AMRS Automated Merchant Reporting System AMRS All-hazard Meteorological Response System ) and AmVestors Financial Corporation (NYSE NYSE See: New York Stock Exchange :AMV AMV Anime Music Video AMV Avian Myeloblastosis Virus AMV Alfalfa Mosaic Virus AMV Army Motor Vehicle AMV Assisted Mechanical Ventilation AMV Armored Maintenance Vehicle AMV Accredited Meter Verifier AMV Annulus Master Valve ) of Topeka, Kansas This article is about the state capital of Kansas. For other uses, see Topeka (disambiguation). Topeka is the capital of the U.S. state of Kansas and the county seat of Shawnee County, which is named after the Shawnee Indians. , today announced that AmerUs will acquire AmVestors in a stock exchange valued at approximately $361 million. The sale, which was unanimously approved by both boards of directors, is expected to close by the end of 1997, subject to approval by regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities and AmerUs and AmVestors shareholders. Under the terms of the agreement, AmVestors shareholders will receive 0.6724 shares of AmerUs Class A stock for each share of AmVestors stock, subject to a "collar" which works to value AmVestors stock at a minimum of $20 per share. On Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , AmerUs stock closed at $28.75 per share. With the acquisition of AmVestors, which specializes in the sale of annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. products, AmerUs further strengthens its presence in the rapidly growing asset accumulation and retirement savings markets. The acquisition comes one month after AmerUs announcement of the purchase of Delta Life Corporation of Memphis, Tenn., which also is an annuity provider. "AmVestors, together with Delta, position AmerUs as a major player in the booming market for retirement and savings products," said Roger K. Brooks, chairman, president and chief executive officer of AmerUs Life Holdings, Inc., the holding company for AmerUs Life Insurance Company. "This is an extremely attractive acquisition and an excellent fit with our strategy to dramatically increase our presence in the asset accumulation business. Furthermore, we expect the transaction will be accretive to earnings in 1998." AmerUs plans to operate AmVestors as a separate company in Topeka Topeka (təpē`kə), city (1990 pop. 119,883), state capital and seat of Shawnee co., NE Kans., on the Kansas River; inc. 1857. In a rich agricultural region, it is an important shipping point for cattle and wheat and a wholesaling, . Expense savings and operational efficiencies of $6 million-to-$8 million will be realized immediately after closing, with further combined expense reductions to be obtained by the end of 1998. "With an excellent management team still in place, AmVestors customers and agents will continue to receive the same quality service, but our bigger size gives all the companies -- AmVestors, Delta and AmerUs -- the opportunity to realize significant economies of scale," Brooks explained. Ralph W. Laster Last´er n. 1. A workman whose business it is to shape boots or shoes, or place leather smoothly, on lasts; a tool for stretching leather on a last. , Jr. chairman of the board and chief executive officer of AmVestors, in commenting on the transaction said, "Combining AmVestors and AmerUs provides our shareholders the opportunity to continue to participate in the growing savings and retirement markets as owners of a company with the critical mass necessary to thrive in the rapidly growing and consolidating annuity business." Laster will join the AmerUs Life Holdings board for a two-year term upon completion of the sale. The current president and general counsel of AmVestors, Mark Heitz, will become president and chief executive officer of AmVestors. Laster, 45, has been a director and officer of AmVestors since 1981; Heitz, 45, has been a director and officer of the company since 1986. Details of the Transaction The transaction provides for an exchange rate of 0.6724 shares of AmerUs stock for every share of AmVestors stock, provided the average closing price of AmerUs stock for the 20-day trading period, which ends 10 trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. prior to completion of the transaction, is at least $29.75. In the event the average AmerUs stock price is less than $29.75 but greater than or equal to $27, the exchange rate will be adjusted to value AmVestors stock at $20 per share. If AmerUs average stock price is less than $27, the exchange ratio will be 0.7407, or AmVestors can give AmerUs notice of its intent to terminate the transaction unless AmerUs adjusts the exchange rate to value AmVestors stock at $20 per share. AmerUs will issue new Common Class A shares for the AmVestors stock, which will almost triple AmerUs public float from its current level of 6.4 million shares. Because of the AmVestors transaction, AmerUs will not go forward with its previously announced plan to conduct a secondary stock offering. AmVestors currently has 17.09 million shares outstanding, including shares into which $65 million in debt may be converted. AmVestors plans to provide notice in the coming week to the debenture debenture (dəbĕn`chər), document acknowledging indebtedness. In Great Britain a debenture is practically the same as a bond, and debenture stock is similar to preferred stock. holders of its intent to redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. the outstanding debentures. Strategic Fit AmerUs noted that the AmVestors acquisition is another important step in the growth strategy begun in 1994 with the merger of its predecessor mutual insurers -- Central Life Assurance Company and American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Mutual Life Insurance Company - and followed by the formation of the nation's first mutual insurance holding company in 1996 and an initial public offering in early 1997. "The asset accumulation segment of the life insurance industry is expected to grow at nearly twice the rate of other business segments over the next five years," Brooks said. "AmVestors saw these changes coming more than a decade ago and in response refocused the company's marketing and product development efforts to serve the changing demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. ." Brooks noted that AmVestors has concentrated on the market dynamics of the growing annuity market since 1984, during which time their total assets have increased from $54 million to $3.4 billion. "AmVestors focus on fixed rate deferred annuity Deferred Annuity A type of annuity contract that delays payments of income, installments or a lump sum until the investor elects to receive them. This type of annuity has two main phases, the savings phase in which you invest money into the account, and the income phase in which products has generated a 250 percent increase in annual annuity premiums from $168.7 million in 1992 to $426.0 million in 1996, and 1997 premiums are expected to exceed $575 million," Brooks said. Laster added that AmVestors highly productive distribution system played a major role in this impressive performance. "During the last five years we increased our independent marketing organizations from seven to 53 and our total number of agents went from 5,750 to nearly 8,300. In this same period, productivity rose 65 percent with average premium per producer increasing from $93,000 in 1992 to more than $155,000 in 1996," Laster said. AmVestors and AmerUs Profile AmVestors has 150 employees and distributes its products through a national network of approximately 8,300 licensed independent agents. Its major operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. are American Investors Life Insurance Company, Inc. a Kansas-based insurance company licensed in 47 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). ; and Financial Benefit Life Insurance Company, a Florida-based life insurance company doing business in 39 states, the District of Columbia and the U.S. Virgin Islands, which it acquired in April 1996. As of June June: see month. 30 1997, AmVestors had assets of $3.4 billion which, along with Delta's $2 billion in assets, will more than double AmerUs assets from $4.5 billion to approximately $10 billion. The Delta acquisition is scheduled to close in October October: see month. . As of June 30, 1997, AmVestors shareholders equity totaled almost $280 million, including the $65 million of convertible debt. The company has approximately $2.8 billion of assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. in its investment portfolio. AmerUs Life Holdings, Inc. is an Iowa corporation located in Des Moines, that was formed as part of the reorganization of American Mutual Life Insurance Company into the nation's first mutual insurance holding company structure. AmerUs serves approximately 320,000 customers with 424,000 life insurance policies and annuity contracts Annuity Contract The written agreement between an insurance company and a customer outlining each party's obligations in an annuity coverage agreement. This document will include the specific details of the contract, such as the structure of the annuity (variable or fixed), any and has a network of 600 career agents and general agents and 1,460 personal producing general agents and subagents. As of June 30, 1997, shareholders equity totaled $535 million, resulting in a per share book value of $23.10. In addition to annuity distribution through AmVestors and Delta, since 1996, AmerUs has been partnered with Ameritas Life Insurance Company The ‘’’Acacia Life Insurance Company’’’ was established in 1867 as a mutual company owned by its policyowners. Its headquarters are in Washington, D.C. of Lincoln Lincoln, city and district, England Lincoln, city (1991 pop. 79,980) and district, Lincolnshire, E England, in the Parts of Kesteven, on the Witham River. , Neb., in a joint venture that markets variable annuities Variable annuities Investment contracts whose issuer pays a periodic amount linked to the investment performance of an underlying portfolio. and life insurance products as well as AmerUs fixed annuity Fixed Annuity An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. products. The joint venture distribution network consists of 250 agents and 450 independent broker-dealers, with approximately 7,500 registered representatives, as well as the AmerUs career agency and PPGA (Plastic PGA) See PGA. PPGA - Plastic Pin Grid Array distribution force. AmVestors common stock trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol AMV; AmerUs Life Holdings common stock trades on the NASDAQ Exchange under the symbol AMRS. -0-
FACT SHEET
AMERUS LIFE HOLDINGS, INC.
(NASDAQ: AMRS)
At a Glance
-- The publicly held parent of AmerUs Life Insurance Company
-- On August 14, 1997, announced agreement to acquire Delta Life
Corporation of Memphis, Tennessee, which is expected to close in
October (see attached facts about Delta).
-- Is the subsidiary of the first mutual insurance holding
company in the nation
-- Markets, underwrites and distributes individual life and
annuity products to individuals and small businesses
-- Serves 320,000 customers with 424,000 life insurance policies
and annuity contracts
-- Corporate Headquarters: Des Moines, Iowa
Financial Highlights of AMRS
-- Total assets of $4.5 billion as of 6/30/97
-- Total revenues of $159.2 million for 2Q97
-- Operating EPS (2Q97) of $0.53; $1.03 for first six months of
1997
-- Net income per share (2Q97) of $0.62; $1.25 for first six
months of 1997.
Stock Data
-- IPO Share Price (1/29/97): $16.50
-- Closing Price (9/20/97): $28.75
Current Ratings
-- A.M. Best A (Excellent)
-- Duff & Phelps AA- (Very High)
-- Moody's A2 (Good)
-- Standard & Poor's A (Good)
Distribution
-- 600 Career Agents and General Agents
-- 1,467 Personal Producing General Agents and Subagents
-- Licensed in 45 states and the District of Columbia
Corporate Officers
-- Roger K. Brooks, Chairman, President and CEO
-- Michael E. Sproule, Executive Vice President and Chief
Financial Officer
-- Thomas C. Godlasky, Executive Vice President and Chief
Investment Officer
-- Victor N. Daley, Senior Vice President and Chief Human
Resources Officer
-- Gary McPhail, President and CEO, AmerUs Life Insurance
Company, the operating subsidiary of AmerUs Life Holdings, Inc.
FACT SHEET
AMVESTORS FINANCIAL CORPORATION
(NYSE: AMV)
At a Glance
-- Founded as a public company in 1965
-- 150 employees
-- 8,300 independent agents licensed in 47 states
-- Principal operating subsidiary American Investors Life ("AIL")
founded in 1965
-- Acquired Financial Benefit Group in April 1996 ("FBG")
-- Home office in Topeka, Kansas; AIL domiciled in Kansas, FBG
domiciled in Florida
Financial Profile (as of 6-30-97)
-- $3.4 billion in assets
-- $214 million in shareholders equity plus $65 million of
convertible debt
-- $179 million of statutory capital, surplus and AVR
-- $11.2 million operating earnings for first six months of 1997;
EPS:
-- $.81 per share; fully diluted EPS: $.73
-- $22.3 million operating earnings in 1996; EPS: $1.63 per
share; fully diluted EPS: $1.54
Stock Data:
-- Closing Price on 9/19/97: $24.94
-- Number of shares outstanding including convertible debt
warrants: 17.09 million
-- Number of options and warrants outstanding: 2.7 million
Current Ratings:
-- American Investors Life: AM Best A-
Duff and Phelps A
Standard & Poor's Aq
-- Financial Benefit Life: AM Best B+ Standard & Poor's BBBq
Annuity sales:
-- 1995 - $357.7 million
-- 1996 - $426.0 million
-- 1997 (projected) - $575.0 million
Investment Portfolio:
-- GAAP carrying value of $2.8 billion as of June 30, 1997
-- Investment income of $191 million in 1996 on average invested
assets of $2.534 billion
-- 97% fixed income
-- 57% - corporate bonds; 23% - mortgage-backed securities
-- Average fixed income credit quality of A1
Pending AmerUs Acquisition:
Delta Life Corporation
At a Glance
--Delta Life & Annuity Company founded in 1979
-- Privately held company since inception
-- Provides single-premium deferred annuity and equity indexed
products
-- Licensed in District of Columbia and all states except New
York
-- Corporate Headquarters: Memphis, Tennessee
-- 120 employees
Financial Highlights
-- Total assets of approximately $2.0 billion as of 6/30/97
-- Total direct annuity deposits of $281 million in 1996
-- Shareholders equity of $107.4 million as of 6/30/97
Current Ratings
-- A.M. Best A (Excellent)
-- Duff & Phelps A+(High Claims Paying Ability)
-- Moody's (Not Currently Rated)
-- Standard & Poor's BBBq (Adequate Financial Security)
Distribution
-- 9 Regional Directors
-- 4,000 Producers
-- Does a significant percentage of its business in Tennessee,
Texas and California
Details of Sale to AmerUs
-- Purchase price of $163 million in cash
-- Privately held by approximately 100 investors
-- Set to close in mid-October 1997
CONTACT: AmerUs Susan SUSAN Smallest Univalue Segment Assimilating Nucleus SUSAN Sub Saharan African Network SUSAN Smart Ultrasonic System for Aircraft NDE M. Boe, 515/283-3236 or AmVestors Financial Mark V. Heitz, 913/295-4410 |
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