Advantage Capital Holdings, LLC (A-CAP) and Oaktree Capital Management, L.P. (Oaktree) have signed a master transaction agreement for Oaktree to acquire a controlling stake in Atlantic Coast Life Insurance Company (ACL).
The multifaceted transaction also involves Oaktree providing capital support to Sentinel Security Life Insurance Company (Sentinel) by funding a surplus note investment into a newly created captive insurance company.
All net proceeds from the transactions will be utilised to support the growth and long-term objectives of Sentinel and its policyholders.
Kenneth King, chairman and CEO of A-CAP, says: “A-CAP is pleased to work with Oaktree given its track record of investing alongside insurers, particularly during times of transition. Oaktree’s insurance-focused credit expertise and flexible, long-term capital will support disciplined growth of our balance sheet, enhance our asset liability profile, and strengthen our ability to serve our policyholders and distribution partners over the long term.”
Jake Wagner, managing director, global opportunities, at Oaktree, notes: “We are pleased to reach agreement with A-CAP on a multifaceted transaction that we believe benefits all stakeholders of Sentinel and Atlantic Coast Life. We look forward to working with the many parties involved, namely, the state regulators, rating agencies, reinsurers, and distributors, as A-CAP and its carriers work to complete the various steps required to close the transaction.”
Patrick C. George, senior vice president, global opportunities, at Oaktree, adds: “The company will benefit from our meaningful experience in regulated carve-outs as it works to complete its pre-closing transaction milestones. Following closing, we believe both Atlantic Coast Life and Sentinel will be well positioned to prioritise policyholder protection, financial strength, and sustainable long-term growth.”
The closing of the deal remains subject to A-CAP performing specific restructuring obligations to effectuate the carve-out of ACL, as well as regulatory approvals and customary closing conditions.
Moelis & Company LLC acted as exclusive financial advisor to A-CAP, with Michelman & Robinson, LLP and Croke Fairchild Duarte & Beres LLC serving as legal advisors.
Goldman Sachs & Co. LLC acted as exclusive financial advisor to Oaktree, with Debevoise & Plimpton LLP serving as legal advisor.
