MISSISSAUGA, ON and RICHMOND HILL, ON, May 31, 2019 /CNW/ - Echelon Financial Holdings Inc. ("EFH" or the "Company") (TSX: EFH) and CAA Club Group ("CAA") are pleased to announce today that they have completed the previously announced sale of Echelon Insurance, the Company's main operating subsidiary that is incorporated under the Insurance Companies Act, and the unregulated warranty business held directly by EFH to CAA (the "Sale Transaction").
The net proceeds to EFH (after adjustments and expenses) was approximately C$166 million, which includes C$12 million that will be held in escrow for the next 30 days while EFH and CAA review and confirm the calculation of regulatory MCT at closing (which EFH has committed will be at least 220%). In the event that the MCT Ratio is less than 220%, monies held in the escrow account will be used to bring the MCT ratio to 220%.
Additional details are available in the Information Circular published by EFH on December 21, 2018.
National Bank Financial Inc. acted as the exclusive financial advisor to Echelon Financial Holdings in connection with the strategic review process conducted by EFH's Special Committee and the Sale Transaction. National Bank Financial Inc. and Blair Franklin Capital Partners provided opinions to EFH's board of directors and EFH's Special Committee, respectively, that the consideration pursuant to the Sale Transaction is fair, from a financial point of view, to EFH. Graham Gow and McCarthy Tétrault LLP acted as legal advisor to EFH. Cassels Brock & Blackwell LLP acted as insurance regulatory counsel to EFH. Stikeman Elliott LLP acted as legal advisor to CAA Club Group.
Cautionary Note Regarding Forward-Looking Information
This news release contains forward-looking information. Such forward-looking information involves numerous assumptions, risks, uncertainties and other factors that could cause actual events to differ materially from those expressed or implied by such forward-looking information. All information, other than statements of historical fact, is forward-looking information. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking information.
About Echelon Financial Holdings Inc.
Founded in 1998, Echelon Financial Holdings Inc. operates in the property and casualty insurance industry in Canada, providing personal and commercial lines insurance exclusively through the broker channel. The Company distributes insurance products through Echelon Insurance and The Insurance Company of Prince Edward Island. It trades on the Toronto Stock Exchange under the symbol EFH. For more information, please visit echeloninsurance.ca.
About CAA Club Group
For over a hundred years, CAA has been helping Canadians stay mobile, safe and protected. The CAA Club Group of Companies is comprised of two automobile clubs, CAA South Central Ontario and CAA Manitoba, providing roadside assistance, travel, insurance service and Member savings for over 2.2 million members. It also includes the CAA Insurance Company, a national property and casualty insurance company, and the Orion Travel Insurance company.
SOURCE Echelon Financial Holdings Inc.