MONTREAL — Constellation Insurance Holdings Inc. says it has entered into its first acquisition agreement, to purchase Ohio National Mutual Holdings Inc. for US$1 billion.
The money will be divided between acquiring National and its subsidiary Ohio National Financial Services by funding cash payments or policy benefits, and investing capital over four years to strengthen its operations.
Constellation is backed by the Caisse de depot et placement du Quebec and the Ontario Teachers' Pension Plan Board.
The company says it will continue to seek acquisitions, demutualizations and other opportunities in the property and casualty and life insurance sector.
Established in 1909, Ohio National is a provider of financial products operating across 49 states, with US$41.2 billion in assets under management as of Dec. 31.
The deal is expected to close in the second half of this year, subject to approval by regulators and Ohio National members.
"Today's announcement marks an important first step for Constellation, as we deliver on our strategy to provide North American stock and mutual insurers access to long-term growth capital, enhanced ratings, scale efficiencies and aligned equity incentives," Constellation founder, chairman and CEO Anurag Chandra said.
Constellation partnered with two of Canada's largest pension fund managers in October 2019 and raised US$500 million from them in initial capital as founding investors.
This report by The Canadian Press was first published March 23, 2021.
The Canadian Press