WHITE PLAINS, N.Y.--( business WIRE)-- Universal American Corp. (NYSE: UAM) revealed today that it has taken part in a definitive agreement to market its Conventional Insurance business to Nassau Reinsurance Group Holdings, L.P. (Nassau). Universal Americans Conventional insurance coverage business includes its Medicare Supplement, Long Term Care, Disability, Life, and also other ancillary insurance items, all of which have remained in run-off since 2012.
Under the regards to the agreement, Nassau will get 100 % of Constitution life insurance policy Firm and The Pyramid Life insurance policy Company, in addition to the Conventional Insurance coverage company composed by American Progressive Life & & Medical insurance Business of New york city. The acquisition price is about $43 million, subject to modifications based upon capital and also surplus at closing. Universal American will likewise be qualified to get prospective earn-out settlements through June 30, 2018 that may cause added payments of between $13 million and $24 million. The deal is approximated to create an after-tax loss of about $150 million, including the write-off of approximately $53 million in abstract properties. The closing of the arrangement is anticipated in early 2016 based on normal closing conditions, including regulatory approval from the Texas, Kansas and also New York insurance policy departments. Upon closing, Nassau will fund an extra $20 million in equity capital to support the transaction and enhance business progressing.
Nassau is an insurance as well as reinsurance business established in April 2015 by insurance policy industry executives Phillip J. Gass and also Kostas Cheliotis. Nassau is supported by Golden Entrance Resources, an exclusive financial investment firm founded in 2000 with greater than $15 billion of fully commited resources.
Richard A. Barasch, Chairman and CEO, commented, Our core strength is our shown capacity to companion with carriers, particularly health care physicians, to improve wellness outcomes while minimizing cost in the Medicare populace. With the sale of our Conventional Insurance businesses, we can much better focus our initiatives on increasing Medicare Advantage in Southeast Texas and upstate New york city, for which we were recently granted 4-Star strategy status for over 96 % of our complete members, as well as keeping the positive drive in our Medicare Shared Financial savings Program ACO business.
While this deal will certainly produce a loss, it allows us to exit the Long Term Care company, in addition to various other non-strategic business lines, and also will liberate added funding that could be gathered for the perk of our investors.
Phillip J. Gass, Nassaus Chairman as well as CEO, stated, Nassau is thrilled to get UAMs Conventional Insurance coverage company, providing UAM with a complete solution to go out these company lines. With stable profitability and also foreseeable money flow, our team believe the Traditional insurance company is an attractive property for Nassau that will certainly develop our onshore reinsurance system which we intend to grow through added shut block reinsurance purchases. Additionally, with the injection of $20 million in brand-new capital, we are reinforcing business financial toughness to assist its insurance holders as well as enable future development possibilities.
Unique Money Dividend; Payment of Debt
Universal American additionally announced that its Board of Supervisors accepted the repayment of a special money dividend of $0.75 each share, payable on October 26, 2015 to investors of document on October 19, 2015. As of September 30, 2015, there were roughly 84 million shares of ordinary shares outstanding.
Universal American additionally revealed that it will certainly settle the exceptional equilibrium on its term lending of $44.9 million and also terminate its credit rating home, including the extra revolver, effective October 14, 2015.
Mr. Barasch continued, We are likewise kindlied to reveal a $0.75 per share unique reward to our shareholders. Cumulatively given that 2010, Universal American will certainly have returned $19.35 per share ($1.6 billion) in money rewards to its investors. After settlement of the dividend as well as the payment of our term financing, our money as well as funding position remain strong, with roughly $55 million in money at the holding firm as well as greater than adequate funding to sustain the continuous growth in our operating business. When the sale of the Standard Insurance business shuts, the profits will also be readily available to the parent.
A section of the returns will be a Certified Reward as well as a section will be a Return of Resources which reduces the owners basis in their Global American stock. The real breakdown will certainly be determined in the first quarter of 2016 as well as uploaded on the Companys web site.
Proforma Equilibrium Sheet
Below is a comparison of the June 30, 2015 Reported and Estimated Proforma Balance Sheet that integrates the terms of the sale of the Typical Insurance policy business, $0.75 per share reward, $44.9 million Credit Facility payment and also the $33.1 million cash we got about the sale of our minority interest in naviHealth in August 2015:
Equilibrium Sheet Data ($s in Millions, other than per share quantities)
Reported June 30, 2015
Approximated Proforma June 30, 2015
Total money and also investments $ 871.1 $ 372.9 Complete assets $ 1,901.7 $ 705.9 Overall policyholder relevant liabilities $ 1,072.4 $ 96.3 Complete reinsurance recoverable (delivered insurance policy holder liabilities) $ 623.0 $ 2.9 Exceptional financial institution debt $ 44.9 $ 0.0 Mandatorily redeemable preferred shares $ 40.0 $ 40.0 Overall shareholders' equity $ 607.3 $ 408.0 Weakened book value each common share $ 7.16 $ 4.81 Weakened common shares superior at balance sheet date 84.9 84.9 Non-GAAP Financial Measures ($s in Millions, other than per share quantities) Complete shareholders equity (excluding AOCI) $ 600.3 $ 404.6 Thinned down book value each usual share (leaving out AOCI) $ 7.07 $ 4.77 Diluted tangible book value each usual share (leaving out AOCI) $ 5.58 $ 3.89 Debt to total funding ratio (excluding AOCI) 12.4 % 9.0 % Money & & Funding Measures ($s in Millions) Total Uncontrolled Money & & Statutory Capital $ 370.0 $ 270.0 Estimated unwanted of 350 % Threat Based Funding $ 185.0 $ 120.0
Regarding Universal American Corp.
. Universal American (NYSE: UAM), with our family members of health care companies, supplies health advantages to people covered by Medicare and/or Medicaid. We are devoted to functioning collaboratively with health care professionals, specifically key care physicians, in order to enhance the health and wellness and also wellness of those we serve and reduce healthcare prices. For even more information on Universal American, kindly visit our site at www.UniversalAmerican.com.
About Nassau
Established in 2015, Nassau Reinsurance Team is an insurance coverage and reinsurance company concentrated on acquiring and also running onshore and offshore systems with long tail obligations in the life, annuity as well as long term treatment sectors. Founded by insurance policy industry executives Phillip J. Gass and also Kostas Cheliotis, Nassau Reinsurance Group has actually received an equity funding dedication of $750 million from Golden Entrance Capital, a private investment company with over $15 billion of committed funding. With extensive experience both on Wall surface Street and as investor-operators of onshore as well as overseas insurance policy, reinsurance and possession administration businesses, Nassau Reinsurance Team is uniquely placed to create and increase companies with a long-term sight. For additional info, browse through www.nsre.com.
Forward Looking Declarations
This press release and also oral declarations made once in a while by our executive police officers may have "progressive" declarations within the definition of Area 21E of the Stocks Exchange Act of 1934, as amended, and also the Personal Securities Lawsuits Reform Act of 1995, understood as the PSLRA. Such declarations that are not historical truths are thus recognized as positive statements and planned to be covered by the safe harbor stipulations of the PSLRA as well as can be recognized by the use of the words "think," "anticipate," "anticipate," "job," "prospective," "estimate," "prepare for," "should," "intend," "may," "will," and also comparable expressions or variants of such words, or by discussion of future economic outcomes and also conferences, technique or threats as well as uncertainties, fads and also conditions in our company and also competitive toughness, all of which include threats and uncertainties.
Where, in any type of progressive statement, we or our administration shares an expectation or idea regarding future results or activities, there could be no assurance that the statement of desire or belief will certainly result or be accomplished or achieved. Our true results might vary materially from our expectations, plans or projections. We warn you that positive declarations are just forecasts and also estimates, which are naturally subject to risks, patterns as well as uncertainties, several of which are past our capacity to manage or predict with precision and also several of which we could not even prepare for. We give no guarantee that we will certainly accomplish our assumptions and also we do not presume duty for the reliability as well as efficiency of the positive declarations. Future occasions and also true outcomes, financial and also or else, might vary materially from the outcomes discussed in the progressive statements as an outcome of several factors, including the danger factors described in the danger aspect area of our SEC reports.
A summary of the information stated in the "Risk Elements" part of our SEC records and various other risks includes, however is not limited to the following: the sale of our Typical Insurance company is subject to countless closing problems and also there could be no assurance that such transaction will ultimately be consummated; the effect of CMSs final Medicare Benefit reimbursement prices for fiscal year 2016; we go through considerable government regulation as well as the potential that CMS and/or various other regulatory authorities could possibly enforce significant fines, fines or operating restrictions on the Firm, including regard False Claims Act matters or RADV audits; the Affordable Care Act as well as succeeding rules promoted by CMS could have a product unfavorable effect on our possibilities for growth and also our economic results; we are investing substantial funding as well as management attention in new business chances, including our ACOs, that might not succeed; we could experience above anticipated clinical loss ratios or lower revenues, especially with our brand-new members in our Northeast markets, which might materially detrimentally affect our outcomes of operations; if we cannot create and also price our products correctly as well as competitively or if the premiums as well as costs we ask for want to cover the expense of health and wellness care services delivered to our participants, our productivity may be materially detrimentally impacted; our considerable shareholders may market or disperse their stock which can cause the cost of our stock to decline; changes in government regulation or legislative reform could boost our prices of working and also negatively influence our earnings; decreases in funding for Medicare programs can materially reduce our profits; failing to decrease our operating expenses could possibly have a product adverse impact on our monetary location, results of procedures and also cash flows; we might not be able to sustain or enhance our CMS Celebrity scores which may cause certain of our strategies to receive less benefits or rebates than our competitors; modifications in government policy or legislative reform, including the influence of Sequestration, can decrease our incomes, enhance our expenses of operating as well as adversely affect our earnings; a significant part of our earnings are tied to our Medicare companies and managed by CMS and also if our federal government contracts are not revived or are cancelled, our company might be significantly impaired; we no more sell long-term care insurance coverage as well as the costs that we bill for the lasting care plans that remain in force could not be adequate to cover the cases expenditures that we incur; any kind of failing by us to handle our operations or to effectively finish or incorporate purchases, dispositions and various other substantial transactions can harm our monetary outcomes, company as well as leads; we could be subject to a cyber-attack or similar network violation that might ruin our track record and have a fabric negative result. Various other unknown or unforeseeable elements could possibly also have material damaging results on future results, performance or accomplishments of Universal American.
All positive declarations consisted of in this release are based after info offered to Global American since the day of the launch, and we assume no commitment to upgrade or modify any kind of such positive declarations.