Echelon Financial Holdings sells its main subsidiary, Echelon Insurance, to CAA Club Group
175.00 Million CAD
On November 9, 2018, Echelon Financial Holdings Inc. ("Echelon") announced that it has entered into an agreement to sell Echelon Insurance, the company's main operating subsidiary that is incorporated under the Insurance Companies Act, to CAA Club Group ("CAA") for C$175 million.
The agreement was made after an extensive strategic review process, overseen by a Special Committee of Echelon's Board of Directors, who recommended the disposition of Echelon Insurance. The purchase price of C$175 million represents a 42% premium to the book value of Echelon Insurance as at June 30, 2018. Pursuant to the terms of the agreement, Echelon has committed to deliver Echelon Insurance to CAA with a Minimum Capital Test ratio of 220% at closing. In addition, CAA will assume up to C$4 million of Echelon's transaction expenses in relation to the agreement.
Echelon is a leading Canada-based provider of property and casualty insurance solutions and services.
CAA, consisting of CAA SCO and CAA Manitoba, is a Canadian non-profit federation which provides auto, home, and travel insurance among other services.
McCarthy Tétrault LLP is advising Echelon with a team led by Graham Gow and Vanessa Chung that includes Patrick McCay, Heidi Gordon, Nancy Carroll and Andrea Schneider.