AmerUs
Life
Holdings, Inc.
FOR IMMEDIATE RELEASE For more information, contact:
Susan M. Boe, Vice President,
Investor Relations
(515) 283-3236
AMERUS LIFE HOLDINGS ANNOUNCES AGREEMENT
TO ACQUIRE AMVESTORS FINANCIAL CORPORATION
Des
Moines, September 22, 1997--AmerUs Life Holdings, Inc. (NASDAQ:AMRS) and
AmVestors Financial Corporation (NYSE:AMV) of Topeka, Kan., today announced that
AmerUs will acquire AmVestors in a stock exchange valued at approximately $361
million. The sale, which was unanimously approved by both boards of directors,
is expected to close by the end of 1997, subject to approval by regulatory
authorities and AmerUs and AmVestors shareholders.
Under the terms of the
agreement, AmVestors shareholders will receive 0.6724 shares of AmerUs Class A
common stock for each share of AmVestors stock, subject to a "collar" which
works to value AmVestors stock at a minimum of $20 per share. On Friday, AmerUs
stock closed at $28.75 per share.
With the acquisition of AmVestors, which
specializes in the sale of annuity products, AmerUs further strengthens its
presence in the rapidly growing asset accumulation and retirement
and savings
markets. The acquisition comes one month after AmerUs' announcement of the
purchase of Delta Life Corporation of Memphis, Tenn., which also is an annuity
provider.
"AmVestors, together with Delta, position AmerUs as a major player in
the booming market for retirement and savings products," said Roger K. Brooks,
chairman, president and chief executive officer of AmerUs Life Holdings, Inc.,
the holding company for AmerUs Life Insurance Company. "This is an extremely
attractive acquisition and an excellent fit with our strategy to dramatically
increase our presence in the asset accumulation business. Furthermore, we expect
the transaction will be accretive to earnings in 1998."
AmerUs plans to operate
AmVestors as a separate company in Topeka. Expense savings and operational
efficiencies of $6-8 million will be realized immediately after closing with
further combined expense reductions to be obtained by the end of 1998.
"With an
excellent management team still in place, AmVestors customers and agents will
continue to receive the same quality service, but our bigger size gives all the
companies-- AmVestors, Delta and AmerUs--the opportunity to realize economies of
scale," Brooks explained.
Ralph W. Laster, Jr., chairman of the board and chief
executive officer of AmVestors, in commenting on the transaction said,
"Combining AmVestors and AmerUs provides our shareholders the opportunity to
continue to participate in the growing savings and retirement markets as owners
of a company with the critical mass necessary to thrive in the rapidly growing
and consolidating annuity business."
Laster will join the AmerUs Life Holdings
board for a two-year term upon completion of the sale. The current president and
general counsel of AmVestors, Mark Heitz, will become
president and chief
executive officer of AmVestors. Laster, 45, has been a director and officer of
AmVestors since 1981; Heitz, 45, has been a director and officer of the company
since 1986.
Details of the Transaction
The transaction provides for an exchange
ratio of 0.6724 shares of AmerUs stock for every share of AmVestors stock,
provided the average closing price of AmerUs stock for the 20- day trading
period, which ends 10 trading days prior to completion of the transaction, is at
least $29.75. In the event the average AmerUs stock price is less than $29.75
but greater than or equal to $27, the exchange ratio will be adjusted to value
AmVestors stock at $20 per share.
If AmerUs' average stock price is less than
$27, the exchange ratio will be 0.7407, or AmVestors can give AmerUs notice of
its intent to terminate the transaction unless AmerUs adjusts the exchange rate
to value AmVestors stock at $20 per share.
AmerUs will issue new Class A common
shares for the AmVestors stock, which will almost triple AmerUs' public float
from its current level of 6.4 million shares. Because of the AmVestors
transaction, AmerUs will not go forward with its previously announced plan to
conduct a secondary stock offering.
AmVestors currently has 17.09 million shares
outstanding, including shares into which $65 million in debt may be converted.
AmVestors plans to provide notice in the coming week to the debenture holders of
its intent to redeem the outstanding debentures.
Strategic Fit
AmerUs noted
that the AmVestors acquisition is another important step in the growth strategy
begun in 1994 with the merger of its predecessor mutual insurers--Central Life
Assurance Company and American Mutual Life Insurance Company--and followed by
the formation of the nation's first mutual insurance holding company in 1996 and
an initial public offering in early 1997.
"The asset accumulation segment of the
life insurance industry is expected to grow at nearly twice the rate of other
business segments over the next five years," Brooks said. "AmVestors saw these
changes coming more than a decade ago and in response refocused the company's
marketing and product development efforts to serve the changing demographics."
Brooks noted that AmVestors has concentrated on the market dynamics of the
growing annuity market since 1984 during which time their total assets have
increased from $54 million to $3.4 billion. "AmVestors' focus on fixed rate
deferred annuity products has generated a 250 percent increase in annual annuity
premiums from $168.7 million in 1992 to $426.0 million in 1996, and 1997
premiums are expected to exceed $575 million," Brooks said.
Laster added that
AmVestors' highly productive distribution system played a major role in this
impressive performance. "During the last five years we increased our independent
market organizations from 7 to 53 and our total number of agents went from 5,750
to nearly 8,300. In this same period, productivity rose 65 percent with average
premium per producer increasing from $93,000 in 1992 to more than $155,000 in
1996," Laster said.
AmVestors' and AmerUs' Profile
AmVestors has 150 employees
and distributes its products through a national network of approximately 8,300
licensed independent agents. Its major operating subsidiaries are American
Investors Life Insurance Company, Inc., a Kansas-based insurance company
licensed in 47 states and the District of Columbia; and Financial Benefit Life
Insurance Company, which it acquired in April 1996, a Florida-based life
insurance company doing business in 39 states, the District of Columbia and the
U.S. Virgin Islands.
As of June 30, 1997, AmVestors had assets of $3.4 billion
which, along with Delta's $2 billion in assets, will more than double AmerUs'
assets from $4.5 billion to approximately $10 billion. The Delta acquisition is
expected to close in mid-October.
As of June 30, 1997, AmVestors shareholders'
equity totaled almost $280 million, including the $65 million of convertible
debt. The company has approximately $2.8 billion of assets under management in
its investment portfolio.
AmerUs Life Holdings, Inc. is an Iowa corporation
located in Des Moines that was formed as part of the reorganization of American
Mutual Life Insurance Company into the nation's first mutual insurance holding
company structure. AmerUs serves approximately 320,000 customers with 424,000
life insurance policies and annuity contracts and has a network of 600 career
agents and general agents and 1,460 personal producing general agents and
subagents. As of June 30, 1997, shareholders' equity totaled $535 million,
resulting in a per share book value of $23.10.
In addition to annuity
distribution through AmVestors and Delta, since 1996 AmerUs has been partnered
with Ameritas Life Insurance Company of Lincoln, Neb., in a joint venture that
markets variable annuities and life insurance products. The joint venture
distribution network consists of 250 agents and 450 independent broker dealers,
with approximately 7,500 registered representatives, as well as the AmerUs
career agency and PPGA distribution forces.
AmVestors common stock trades on
the New York Stock Exchange under the symbol AMV; AmerUs Life Holdings common
stock trades on the NASDAQ Exchange under the symbol AMRS.
######
FACT SHEET
AMVESTORS FINANCIAL CORPORATION
(NYSE: AMV)
At a Glance
* Founded as a public company in 1965
* 150 employees
* 8,300 independent agents licensed in 47 states
* Principal operating subsidiary American Investors Life ("AIL") founded in 1965
* Acquired Financial Benefit Group in April 1996 ("FBG")
* Home office in Topeka, Kansas; AIL domiciled in Kansas, FBG domiciled in
Florida
Financial Profile (as of 6-30-97)
* $3.4 billion in assets
* $214 million in shareholders'
equity plus $65 million of convertible debt
* $179 million of statutory capital, surplus and AVR
* $11.2 million operating earnings for first six months of 1997
- - EPS: $.81 per share; fully diluted - EPS: $.73
* $22.3 million operating
earnings in 1996; EPS: $1.63 per share; fully diluted - EPS:$1.54.
Stock Data:
Closing Price on 9/19/97: $24.94
Number of shares outstanding including
convertible debt warrants: 17.090 million
No. of options and warrants
outstanding: 2.7 million shares
Current Ratings: American Investors Life : AM Best A-
Duff and Phelps A
Standard & Poor's Aq
Financial Benefit Life: AM Best B+
Standard & Poor's BBBq
Annuity sales:
* 1995 - $357.7 million
* 1996 - $426.0 million
* 1997 (projected) - $575.0 million Investment Portfolio:
* GAAP carrying value of $2.8 billion as of June 30, 1997
* Investment income of $191 million in 1996 on average invested assets of
$2.534 billion
* 97% fixed income
* 57% - corporate bonds; 23% - mortgage-backed securities
* Average fixed income
credit quality of A1 FACT SHEET AMERUS LIFE HOLDINGS, INC. (NASDAQ: AMRS) At a
Glance
* The publicly held parent of AmerUs Life Insurance Company
* On August
14, 1997 announced agreement to acquire Delta Life Corporation of Memphis,
Tennessee, which is expected to close in October (see attached facts about
Delta).
* Is the subsidiary of the first mutual insurance holding company in the
nation
* Markets, underwrites and distributes individual life and annuity
products to individuals and small businesses
* Serves 320,000 customers with
424,000 life insurance policies and annuity contracts
* Corporate Headquarters:
Des Moines, Iowa
Financial Highlights of AMRS
* Total assets of $4.5 billion as of 6/30/97
* Total revenues of $159.2 million for 2Q97
* Operating EPS (2Q97) of $0.53, $1.03 for first six months of '97
Net income per share (2Q97) of $0.62; $1.25 for first six months of '97
Stock Data
* IPO Share Price (1/29/97): $16.50
* Closing Price 9/20/97: $28.75
Current Ratings
* A.M. Best A (Excellent)
* Duff & Phelps AA- (Very High)
* Moody's A2 (Good)
* Standard & Poor's A (Good)
Distribution
* 600 Career Agents and General Agents
* 1,467 Personal Producing General Agents and Subagents
* Licensed in 45 states and the District of Columbia
Corporate Officers
* Roger K. Brooks, Chairman, President and CEO
* Michael E. Sproule, Executive Vice President and Chief Financial Officer
* Thomas C. Godlasky, Executive Vice President and Chief Investment Officer
* Victor N. Daley, Senior Vice President and Chief Human Resources Officer
* Gary McPhail, President and CEO, AmerUs Life Insurance Company, the
operating subsidiary of AmerUs Life Holdings, Inc.
Pending AmerUs Acquisition:
Delta Life Corporation
At a Glance
* Delta Life & Annuity Company founded in 1979
* Privately held company since inception
* Provides single-premium deferred annuity and equity indexed products
* Licensed in District of Columbia and all states except New York
* Corporate Headquarters: Memphis, Tennessee
* 120 employees
Financial Highlights
* Total assets of approximately $2.0 billion as of 6/30/97
* Total direct annuity deposits of $281 million in 1996;
* Shareholders' equity of $107.4 million as of 6/30/97
Current Ratings
* A.M. Best A (Excellent)
* Duff & Phelps A+(High Claims Paying Ability)
* Moody's (Not Currently Rated)
* Standard & Poor's BBBq (Adequate Financial Security)
Distribution
* 9 Regional Directors
* 4,000 Producers
* Does a significant percentage of its business in Tennessee, Texas and
California
Details of Sale to AmerUs
* Purchase price of $163 million in cash
* Privately held by approximately 100 investors
* Expected to close in mid-October 1997