The Healthcare of Ontario Pension Plan Trust Fund (HOOPP) has acquired 1.15 million common shares of Definity Financial Corporation for approximately $76.7 million as part of a $385.7 million private placement initiative.
The transaction is intended to help finance Definity’s $3.3 billion cash acquisition of Travelers’ Canadian operations, excluding its surety business.
Read more: Definity to buy insurer's Canadian operations in $3.3-billion deal
HOOPP exercised its pre-emptive right under a governance agreement with Definity dated November 23, 2021. The shares, purchased at $66.65 each, were issued through a private placement and are subject to a four-month hold period under Canadian securities laws.
The balance of the offering included 4,631,000 common shares issued to accredited investors and other exempt purchasers at the same price, generating approximately $309 million in gross proceeds. The syndicate of underwriters was led by RBC Capital Markets, acting as sole bookrunner.
Definity, a property and casualty insurance provider formed in 2021, operates under brands such as Economical Insurance, Sonnet Insurance, Family Insurance Solutions, and Petline Insurance. For the 12-month period ending March 31, 2025, the company recorded over $4.5 billion in gross written premiums and held approximately $3.4 billion in equity attributable to common shareholders.
According to the company, the net proceeds from both offerings will be applied to the purchase price of the Travelers Canada acquisition.
Read next: AM Best affirms Definity ratings amid $3.3-billion Travelers Canada acquisition
The deal is not subject to a financing condition or contingency. If the acquisition does not close, Definity plans to use the funds for general corporate purposes.
The common shares sold in these placements have not been and will not be registered under the US Securities Act of 1933 or any state securities laws. They may not be offered or sold within the United States or to US persons unless in transactions that qualify for applicable exemptions.
How do you view the use of pension fund capital in private placements tied to major insurance acquisitions? Join the discussion in the comments.
