Trean Insurance Group, Inc. (Nasdaq: TIG) (“Trean” or the
“Company”), a leading provider of products and services to the
specialty insurance market, today announced that it has entered
into a definitive merger agreement with affiliates of Altaris, LLC
(collectively with its affiliates, “Altaris”), which currently owns
approximately 47% of Trean’s outstanding common stock. Under the
terms of the agreement, Altaris will acquire all of the common
stock that it does not currently own for $6.15 in cash per share,
representing a 97% premium to Trean’s closing price on December 15,
2022, the last trading day prior to this announcement and a 133%
premium to the 30-day volume-weighted average price per share of
$2.64 as of December 15, 2022.
Upon receiving a proposal from Altaris to acquire the Company,
which was conditioned on approval by a special committee of
independent and disinterested directors and by a majority of the
voting power of unaffiliated stockholders, the Board of Directors
formed such a Special Committee comprised solely of independent and
disinterested directors to evaluate the proposal and alternatives
thereto and make a recommendation to the Board of Directors. The
Special Committee was advised by its own independent financial and
legal advisors. Following the unanimous recommendation of the
Special Committee, the Board of Directors of the Company (other
than Daniel Tully, who abstained from participating in the
deliberations or voting on the matter due to his position as
Co-Founder and Managing Director of Altaris) unanimously approved
the merger agreement and is recommending to Trean’s stockholders
that they adopt and approve the merger agreement.
Julie Baron, President and Chief Executive Officer of Trean,
said, “This agreement with Altaris delivers immediate and
substantial value to all stockholders of Trean while positioning
the Company to continue its focus on strong partnerships,
underwriting discipline and exceptional claims management to drive
growth over the long term. As a long-term investor in the Company,
Altaris is deeply familiar with our business and recognizes the
value of our talented team, and we look forward to Altaris’
continued contributions to Trean as a private company.”
Daniel Tully, Co-Founder and Managing Director of Altaris, said,
“We have known Trean for many years and have long admired their
disciplined program partner selection, prudent financial management
and world-class team. We believe that Trean’s specialty insurance
products and services are highly differentiated in the market, and
we look forward to contributing our resources and expertise to
support the Company’s next phase of growth.”
Additional Transaction Details
The transaction, which implies a total equity value for the
Company of approximately $316 million, is expected to close during
the first half of 2023.
Completion of the transaction is subject to certain closing
conditions, including obtaining approval of a majority of the
outstanding shares of Trean common stock held by stockholders that
are not affiliated with Altaris and receiving certain regulatory
approvals. Further information regarding the terms and conditions
in the merger agreement will be contained in a Current Report on
Form 8-K which will be filed promptly with the Securities and
Exchange Commission.
Following completion of the transaction, Trean will become a
privately held company and its common stock will no longer be
traded on Nasdaq.
Following the closing of the transaction, it is expected that
Julie Baron will remain President and Chief Executive Officer of
Trean and that Andrew O'Brien, the founder of Trean and Executive
Chairman of the Board, will continue to serve on the Board. The
Company is expected to maintain its headquarters in Wayzata,
Minnesota.
Advisors
Houlihan Lokey is acting as independent financial advisor to the
Special Committee, and Morris, Nichols, Arsht & Tunnell LLP is
acting as independent legal advisor to the Special Committee. Bass
Berry & Sims PLC is serving as legal advisor to the Company.
Kirkland & Ellis LLP is serving as legal advisor to
Altaris.
About Trean Insurance Group, Inc.
Trean Insurance Group, Inc. (Nasdaq: TIG) provides products and
services to the specialty insurance market. Trean underwrites
specialty casualty insurance products both through its program
partners and its own managing general agencies. Trean also provides
its program partners with a variety of services including issuing
carrier services, claims administration and reinsurance brokerage.
Trean is licensed to write business across 49 states and the
District of Columbia. For more information, please visit
www.trean.com.
About Altaris
Altaris is a healthcare investment firm with an
exclusive focus on building companies that deliver value to the
healthcare system through innovation and efficiency. Since
inception in 2003, Altaris has invested in 49 healthcare companies
which have generated significant value appreciation for
investors. Altaris is headquartered in New York City and
manages approximately $5.0 billion of equity capital. For more
information, please visit www.altariscap.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains, and the Company’s other filings and
press releases may contain, forward-looking statements, which
include all statements that do not relate solely to historical or
current facts, such as statements regarding our expectations,
intentions or strategies regarding the future. In some cases, you
can identify forward-looking statements by the following words:
“may,” “will,” “could,” “would,” “should,” “expect,” “intend,”
“plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,”
“aim,” “potential,” “continue,” “ongoing,” “goal,” “can,” “seek,”
“target,” or the negative of these terms or other similar
expressions, although not all forward-looking statements contain
these words. These forward-looking statements are based on
management’s beliefs, as well as assumptions made by, and
information currently available to, the Company. Because such
statements are based on expectations as to future financial and
operating results and are not statements of fact, actual results
may differ materially from those projected and are subject to a
number of known and unknown risks and uncertainties, including:
(i) the risk that the proposed merger (the “Merger”) may not
be completed in a timely manner or at all, which may adversely
affect the Company’s business and the price of the Company’s common
stock; (ii) the failure to satisfy any of the conditions to
the consummation of the proposed transaction, including the
adoption of the agreement and plan of merger (the “Merger
Agreement”) by the Company’s stockholders and the receipt of
certain regulatory approvals; (iii) the occurrence of any
event, change or other circumstance or condition that could give
rise to the termination of the Merger Agreement, including in
circumstances requiring the Company to pay a termination fee;
(iv) the effect of the announcement or pendency of the
proposed transaction on the Company’s business relationships,
operating results, and business generally; (v) risks that the
proposed transaction disrupts the Company’s current plans and
operations; (vi) the Company’s ability to retain and hire key
personnel in light of the proposed transaction; (vii) risks
related to diverting management’s attention from the Company’s
ongoing business operations; (viii) unexpected costs, charges,
or expenses resulting from the proposed Merger; (ix) potential
litigation relating to the Merger that could be instituted against
Altaris, the Company, or their respective directors, managers or
officers, including the effects of any outcomes related thereto;
(x) certain restrictions during the pendency of the Merger
that may impact the Company’s ability to pursue certain business
opportunities or strategic transactions; (xi) unpredictability
and severity of catastrophic events, including but not limited to
acts of terrorism, war or hostilities, or pandemics, including
the COVID-19 pandemic, as well as management’s response
to any of the aforementioned factors; (xii) other risks
described in the Company’s filings with the Securities and Exchange
Commission (“SEC”), such as risks and uncertainties described under
the headings “Forward-Looking Statements,” “Risk Factors” and other
sections of the Company’s Annual Report on
Form 10-K filed with the SEC on March 16, 2022 and
subsequent filings; and (xiii) those risks and uncertainties
that will be described in the proxy statement that will be filed
with the SEC (if and when it becomes available) from the sources
indicated below, including any considerations taken into account by
the Special Committee and the Board of Directors in approving the
merger agreement and recommending to Trean’s stockholders that they
adopt and approve the merger agreement. While the list of risks and
uncertainties presented here is, and the discussion of risks and
uncertainties to be presented in the proxy statement will be,
considered representative, no such list or discussion should be
considered a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles to the realization of forward-looking statements.
Consequences of material differences in results as compared with
those anticipated in the forward-looking statements could include,
among other things, business disruption, operational problems,
financial loss, and legal liability to third parties and similar
risks, any of which could have a material adverse effect on the
completion of the Merger and/or the Company’s consolidated
financial condition, results of operations, or liquidity. The
forward-looking statements speak only as of the date they are made.
The Company undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Additional Information and Where to Find it
In connection with the Merger, the Company intends to file a
preliminary proxy statement on Schedule 14A with the SEC. The
Company and Parent intend to jointly file a transaction statement
on Schedule 13E-3 with the SEC. BEFORE MAKING ANY VOTING OR
INVESTMENT DECISION, COMPANY STOCKHOLDERS ARE URGED TO READ THE
PRELIMINARY PROXY STATEMENT, THE SCHEDULE 13E-3 AND ANY OTHER
RELEVANT DOCUMENTS, INCLUDING THE DEFINITIVE PROXY STATEMENT (IF
AND WHEN IT BECOMES AVAILABLE), THAT ARE FILED OR WILL BE FILED
WITH THE SEC (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO)
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE
MERGER AND RELATED MATTERS. The definitive proxy statement (if and
when it becomes available) will be mailed to stockholders of the
Company. Stockholders will be able to obtain
the documents (when they become available) free of charge at the
SEC’s website, http://www.sec.gov. In addition, stockholders may
obtain free copies of the documents (if and when they become
available) on the Company’s website, www.trean.com, under the
heading “Investor Relations.”
Participants in the Solicitation
The Company and certain of its directors, executive officers and
other employees, under the SEC’s rules, may be deemed to be
participants in the solicitation of proxies of the Company’s
stockholders in connection with the Merger. Additional information
regarding the interests of those participants and other persons who
may be deemed participants in the Merger and their respective
direct and indirect interests in the Merger, by security holdings
or otherwise, will be included in the definitive proxy statement
and other materials to be filed with the SEC in connection with the
Merger (if and when they become available). Information relating to
the foregoing can also be found in the Company’s definitive proxy
statement for its 2022 Annual Meeting of Stockholders (the “2022
Proxy Statement”), which was filed with the SEC on April 5, 2022.
To the extent that holdings of Company’s securities have changed
since the amounts printed in the 2022 Proxy Statement, such changes
have been or will be reflected on Statements of Change in Ownership
on Form 4 filed with the SEC. Free copies of these documents may be
obtained as described in the preceding paragraph.
CONTACTS
Trean Contacts
Investor Relationsinvestor.relations@trean.com(952) 974-2260
FGS GlobalTrean@fgsglobal.com
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