Aegon announces agreement to acquire Clark, Inc.
Clark is a company specializing in the sale of Corporate-Owned (COLI) and Bank-Owned (BOLI) life insurance and other benefit programs, for approximately USD 293 million.
Aegon will commence a cash tender offer for the issued and outstanding shares of Clark for USD 16.55 per share. The transaction is expected to close early in the first quarter of 2007, subject to normal closing requirements.
BOLI/COLI life insurance is marketed to institutional clients to fund their long-term employee benefit liabilities, such as post retirement medical plans and executive compensation plans. Aegon has provided insurance products in the COLI/BOLI market for over a decade. This acquisition is in line with Aegon's strategy to expand into businesses that offer profitable growth and further expand Aegon's multi-channel distribution capability.
Existing long-term strategic partnership
Aegon and Clark have been strategic partners for many years and Aegon is Clark's largest corporate shareholder with a 13% stock ownership. Aegon will purchase the remaining stock of Clark, and immediately following the purchase, a Clark management group will acquire some of Clark's other business segments (OBS) not considered core to Aegon. These other business segments include Pearl Meyer & Partners, The Federal Policy Group, Healthcare, Medex, Clark Strategic Advisors, Clark Benson and Baden. The management group plans to form a privately held company, which will hold these business segments. The OBS purchase agreement provides that the Clark special committee of independent directors will solicit other potential buyers for the OBS to determine if a superior transaction is available to Clark and its shareholders. If this process results in a higher price for the OBS, the original OBS purchase agreement will be terminated and the net increase in value obtained in this process will increase the price Clark shareholders receive in the transaction.
The acquisition agreement contains customary provisions regarding Clark's ability to solicit and respond to a superior proposal for Clark, as well as a customary termination fee if Clark accepts a superior proposal and the acquisition agreement is terminated. The acquisition agreement and the OBS purchase agreement will be filed by Clark with the Securities and Exchange Commission and will be publicly available.
"Aegon's prominence as a large, multi-national organization supports our business objective of expanding services to a greater number of clients. Clark's business goals - increasing profits, distribution opportunities, client base, and product and service offerings - are closely aligned with those of Aegon", said Tom Wamberg, Chairman and CEO of Clark.
"Clark, Inc.'s expertise combined with their distribution platform in the compensation and benefit financing area fit well with our strategy to strengthen the financial solutions available to our customers", said Pete Gilman, head of Aegon's COLI/BOLI business.
Aegon will acquire Clark using existing excess capital and expects the acquisition to have a marginally positive effect on earnings per share.
