Echelon Financial Holdings (EFH) has entered into a letter of intent with Cooke Holdings to acquire the remaining 25% ownership of The Insurance Company of Prince Edward Island (ICPEI) that EFH does not own.
Under the terms of the acquisition, EFH will acquire from Cooke all of the remaining issued and outstanding shares of ICPEI not already owned by EFH, for a total cash consideration of about $6,315,000. The transaction is expected to close on or before April 01, 2021, subject to customary regulatory approval.
As part of the transaction, EFH plans to complete a non-brokered private placement financing of up to $3,739,002, which consists of the sale of up to 2,633,100 common shares of EFH, at a price of $1.42 per share.
ICPEI, founded in 1987, provides home, auto, and commercial insurance solutions. The company’s products are sold through a network of brokers that work across all three Maritime Provinces and Quebec.
The private placement deal cements EFH’s full ownership of its last remaining insurance business in Canada.
Read more: Sale of Echelon Insurance to CAA subsidiary gets final approval
In 2019, EFH sold its subsidiary Echelon Insurance to a CAA Club Group company. By selling off Echelon Insurance, EFH was only left with a 75% shareholding in ICPEI and a cash reserve of about $80 million, at that time.
