Reliance Global Group (RELI) to Acquire Medigap Health Insurance Company for $19.6M in Cash and Stock - StreetInsider.com
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Reliance Global Group, Inc. (Nasdaq: RELI; RELIW), which combines AI and cloud-based technologies with the personalized experience of a traditional insurance agency, today announced that it has entered into a definitive agreement to acquire Medigap Health Insurance Company (âMedigapâ) in an asset purchase transaction. The acquisition is expected to close during the first quarter of 2022, and is subject to customary closing conditions.
Medigap is an insurance brokerage company headquartered in Florida, specializing in Medicare supplement insurance. Medigap generated revenue of approximately $7 million1 for the trailing twelve months ended September 30, 2021.
Ezra Beyman, CEO of Reliance Global Group, commented, âWe are excited to announce the upcoming acquisition of Medigap, one of the nationâs fastest growing providers of Medicare supplemental insurance coverage. This planned acquisition would expand our capabilities within the Medicare supplement market, which we believe would be a perfect complement and highly synergistic with our existing portfolio companies. Importantly, this acquisition is consistent with our strategy of acquiring growing, cash flow positive agencies at attractive multiples. In addition to bolstering our revenue by more than 70%, we believe this transaction has the potential to be highly accretive.â
âI am also delighted to announce that following the acquisition, Kyle Perrin will remain COO of Medigap. Kyle brings an extensive background in the Medicare supplement market. We look forward to his contributions as we seek to aggressively grow this business by leveraging the deep talent and technological capabilities of Reliance. In addition, we anticipate significant operating synergies across the organization, which we believe will contribute to enhanced profitability. Iâd especially like to thank Jonathan Fortman, who was recently promoted to Vice President of Acquisitions for Reliance Global Group, for his tremendous efforts and support, which helped make this acquisition possible.â
Total consideration for Medigap is expected to be approximately $19.6 million, consisting of both cash and restricted common stock of Reliance Global Group.
Additional details on the acquisition will be available in the Companyâs Current Report on Form 8-K, to be filed with the Securities and Exchange Commission.