Year: 2014
Flexpoint Ford, LLC (Flexpoint), a private equity firm focused on the financial services and healthcare sectors, today announced that it has agreed to sell its minority stake in ARX Holding Corp., the parent company of American Strategic Insurance Corp. (ASI) to The Progressive Corporation (NYSE: PGR) as part of a broader transaction in which Progressive will acquire a controlling interest in ASI.
ASI is one of the top 20 homeowners carriers in America, specializing in personal and commercial property insurance, personal umbrella insurance, and primary and excess flood insurance. The group, which is rated A (Excellent) by A.M. Best, is headquartered in St. Petersburg and offers coverage in 25 states plus the District of Columbia. The company currently writes more than $1 billion of premium and maintains over $550 million in surplus.
“Since 2006, Flexpoint has been a great partner for ASI and their insights and advice have been integral in the growth of company,” said John Auer, CEO of ASI. “This is a great opportunity for ASI, as our intention has long been to become the Progressive of home insurance. We’ve been working with Progressive for years, but this transaction will advance both companies and attract a market segment of bundled customers that remains underpenetrated by us both.”
Don Edwards, Chief Executive Officer of Flexpoint, said, “ASI’s unparalleled expertise in the property insurance market has allowed the company to achieve tremendous success. The management team and company have exceeded our high expectations, and have delivered an excellent return for our investors. We are confident that ASI is well positioned for the future, and with Progressive’s continued support the company will further strengthen its market position.”
The transaction is expected to close in the second quarter of 2015, subject to the receipt of insurance regulatory approvals and satisfaction of other closing conditions.
Flexpoint Ford, LLC (“Flexpoint”), a private equity firm focused on the financial services and healthcare sectors, today announced a definitive agreement to sell T&H Global Holdings, LLC and its subsidiaries (“VeriClaim”) to Sedgwick Claims Management Services, Inc. (“Sedgwick”). The primary investors of Sedgwick are affiliates of Kohlberg Kravis Roberts & Co. L.P. and Stone Point Capital LLC. VeriClaim has been majority owned by affiliates of Flexpoint since March 2011.
T&H Global Holdings, LLC, through its subsidiaries VeriClaim, Inc., VRS VeriClaim U.K. Ltd, Unified Investigations & Sciences, Inc., Cramer, Johnson, Wiggins & Associates, Inc., (CJW) and Ellis May, is a premier provider of specialized insurance claims services to insurance carriers, insurance brokers, corporations and public entities. The company leverages its specialized domain expertise, experienced professional staff, and process knowledge to provide its clients loss adjusting, third-party claims management and fire and forensics investigation services. The company was founded in 1918 and is headquartered in Naperville, Illinois.
Mike Arbour, Chief Executive Officer of VeriClaim, said, “We are excited to partner with Sedgwick to build the global leader in specialized insurance claims services. Flexpoint’s expertise in the insurance sector and strategic advice have been integral in growing VeriClaim into a market leading platform. Additionally, Flexpoint has been a valuable financial partner that has supported VeriClaim through multiple strategic acquisitions.”
Chris Ackerman, a Managing Director of Flexpoint, commented, “VeriClaim’s focus on providing exceptional claims services to a global customer base is unmatched in the insurance services industry and has allowed the company to extend its market leadership. By achieving strong organic growth and executing a successful acquisition strategy, the management team has delivered an excellent return for our investors and exceeded our high expectations. We are confident that VeriClaim will continue to be the preeminent platform in specialized insurance claims services and that the partnership with Sedgwick will position the combined company for significant growth.”
The transaction is expected to close within the next 60 days, subject to customary regulatory approvals. Following the transaction, VeriClaim will operate as a subsidiary of Sedgwick.
Kirkland & Ellis LLP served as legal advisor to Flexpoint Ford, LLC. Simpson Thacher & Bartlett LLP served as legal advisor to Sedgwick.
Corporate Finance Group, Inc. (CFGI), a specialized financial consulting firm, announced today that it has closed an equity investment and partnered with Flexpoint Ford, LLC, a private equity firm focused on the financial services and healthcare sectors. The partnership with Flexpoint Ford will provide CFGI with the capital and resources to accelerate growth and expand the Company’s service offering and geographic footprint.
CFGI is a specialized financial consulting firm that assists companies through a range of routine and complex business needs. Founded in 2000 by two former Big 4 professionals, Nick Nardone and Shane Caiazzo, CFGI is an established industry leader with the resources to successfully navigate today’s complex technical accounting, financial reporting, tax, and compliance landscapes. With a proven 14-year track record, CFGI has assisted hundreds of clients across multiple industries and has positioned itself as a trusted, valuable extension of an organization’s finance team.
Reflecting on the new partnership, Nick Nardone stated, “Over the years, our exceptional team at CFGI has built a unique culture and value proposition that is the foundation of our success. We are very excited to partner with Flexpoint Ford and believe that their deep industry expertise coupled with our shared vision for the future will enable CFGI to more rapidly introduce our business model and brand on a national stage.”
Chris Ackerman, Managing Director of Flexpoint Ford, sees great potential in CFGI and believes their high-caliber expertise and proven model is a true differentiator. Ackerman commented, “As a private equity firm that has invested in businesses with varying finance and accounting needs, we are frequent users of these services and strong believers in the CFGI value proposition. We are impressed by their ability to attract and retain the highest performing professionals in the industry. Their focus on quality and passion for client service has translated into a unique service delivery model and a very high level of customer loyalty. We look forward to developing a successful and longstanding partnership that further strengthens an already compelling business and culture at CFGI.”
CFGI has offices in Boston and New York, and employs over 100 professionals with Big 4 public accounting expertise that can fulfill a variety of client needs without the restrictions of auditor independence. The Firm will continue to be led by its four existing Partners and team of Managing Directors. CFGI will operate as an independent company and maintain its emphasis on providing unique and highly specialized financial consulting solutions.
CFGI Partner, Shane Caiazzo, commented, “The opportunity to partner with a successful private equity firm such as Flexpoint Ford is a testament to the entire CFGI team, whose depth of expertise and passion for serving our clients has brought CFGI to where it is today. CFOs continually need access to technical expertise and high-quality resources, but free from the restrictions of auditor independence. Our unique approach to providing non-audit technical and advisory services has proven valuable to our clients who strive to keep up with changing regulatory complexities. With Flexpoint Ford’s capital, resources, and experience partnering with management teams to grow businesses, we will continue to build out our national expertise and be able to achieve a pace of growth and scale that is the logical next step for CFGI.”
RetailCapital, a data and analytics company that makes financing available to a broad range of small and medium size businesses (“SMBs”), has secured a new round of investment from Flexpoint Ford, LLC, a private equity firm focused on the financial services and healthcare sectors. With over $1 billion under management, Flexpoint Ford typically invests between $30 million and $150 million in its portfolio companies.
Coinciding with the investment, RetailCapital has been ranked #35 on the Inc. 500/5000 list of fastest growing companies in America and it named financial technology veteran Glenn Goldman as its new CEO to lead the next phase of its growth. For more than 12 years, Goldman led Capital Access Network (now CAN Capital) and grew it into the largest non-bank provider of capital to small businesses in the United States.
For the past year, as Entrepreneur in Residence at Flexpoint Ford, Goldman has studied the global market for small business alternative finance, as well as the optimal role for big data and predictive analytics, to develop a winning formula for his next venture. “There has been a great deal of business model, technology and customer experience innovation delivered by existing non-bank providers of capital to small businesses and a lot for us as an industry to be proud of. But this is really only the beginning,” Goldman said.
“On the whole, traditional financial institutions provide an uncertain and slow user experience to the very narrow segment of small business credit profiles that they serve. Peer-to-peer and online lenders have solved the speed problem and can deliver capital in hours rather than months, but their product lines are limited and often come at a cost that doesn’t align with the needs of small business owners who fall just short of qualifying for financing from traditional institutions. Also, only a precious few of these non-bank providers have achieved scale and profitability,” Goldman said.
“With the limitations on product and target market, there is significant opportunity to materially improve cost of acquisition and customer lifetime value. Data science and a nimble technology platform make delivery across these verticals possible. We searched for and found in RetailCapital, and its people, a solid foundation upon which to pivot and execute on our vision. With a culture that is based on best-in- class execution, and a distribution strategy that generates 25 percent of its fundingthrough direct marketing, our marketplace model will thrive.”
Under Goldman’s leadership, RetailCapital plans to expand into an additional location in New York City and build out a number of key functions including data science, risk, marketing and product development, technology and online customer acquisition and fulfillment. The company’s existing operational platform in Michigan will continue to grow to support the execution of this strategy.
“We have been studying the FinTech space for the past few years awaiting an attractive entry point,” said Steven L. Begleiter, managing director at Flexpoint Ford. “Developing the investment thesis along with Glenn, and being patient but moving quickly when we found RetailCapital, is an entry strategy we are well positioned to execute.”
“We believe that the ongoing disruption in the delivery of traditional financial services is a secular trend with significant runway. RetailCapital’s strong unit economics coupled with Glenn’s leadership will enable the Company to continue its rapid growth and value creation,” said Daniel Edelman, vice president at Flexpoint Ford.
“Partnering with Flexpoint Ford and bringing an accomplished industry veteran like Glenn on board will help rocket RetailCapital into its next phase of growth,” said RetailCapital Co-Founder Ryan Rosett. “We’ve built an attractive business over the past four years but our ambition is to do much more – and that means building out a uniquely powerful business model for our customers, sales partners, shareholders and employees. Today’s small business owners find that over their life cycle, they must go through multiple channels to fulfill their capital needs. RetailCapital’s business model will be breaking the mold by serving a broader spectrum of small businesses through a wider range of products and pricing – meeting their needs throughout their life cycles. This is going to be a big win for small businesses.”