Echelon Financial Holdings sells its main subsidiary, Echelon Insurance, to CAA Club Group
May 31, 2019
166.00 Million CAD
On May 31, 2019, Echelon Financial Holdings Inc. ("Echelon") announced the closing of sale of Echelon Insurance, the company's main operating subsidiary that is incorporated under the Insurance Companies Act, to CAA Club Group ("CAA").
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 net proceeds to Echelon is approximately C$166 million, which includes C$12 million that will be held in escrow for 30 days while Echelon and CAA review and confirm the calculation of regulatory MCT at closing. Echelon has committed to deliver Echelon Insurance to CAA with a Minimum Capital Test ratio of 220% and in the event that the MCT ratio is lower, the C$12 million that is held in escrow will be used to bring the MCT ratio to 220%.
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 advised Echelon with a team led by Graham Gow and Vanessa Chung that included Patrick McCay, Heidi Gordon, Nancy Carroll and Andrea Schneider.