Deals & People April 17, 2013

NFP in $1.3B Deal with Madison Dearborn

National Financial Partners Corp. said it agreed to be acquired by Madison Dearborn Partners for $25.35 per share in cash.
Reported by

The equity value of the transaction is approximately $1.3 billion, which includes the full value of the company’s convertible debt. Under the terms of the agreement, NFP shareholders will receive $25.35 in cash for each share of NFP common stock they own. The purchase price represents a premium of approximately 26% over NFP’s closing share price of $20.05 on March 12, the last day of trading before press reports that NFP was considering a possible sale of the Company.

As previously disclosed, as a result of interest it had received from private equity firms, NFP’s board of directors formed a special committee of independent directors to explore a possible sale of the company. After a thorough and rigorous process, and with the assistance of its legal and financial advisers, the special committee negotiated and recommended this transaction with Madison Dearborn to the full board. The transaction was unanimously approved by the board.

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“This compelling transaction provides shareholders with substantial value, and is a successful outcome of the thorough process undertaken by our board,” said Jessica M. Bibliowicz , chairman and chief executive officer of NFP. “This agreement also provides significant opportunities for our clients and employees by partnering with an extremely well-respected firm with proven expertise in the financial services sector. NFP has a solid foundation, and we are confident the company will thrive as a private enterprise in this next chapter of its evolution.” 

(Cont’d…)

“Madison Dearborn’s interest in NFP is a clear endorsement of the quality and success of our business, the value of our client-centric culture, and the hard work and dedication of our people. We are confident that partnering with this world-class investor will help us continue to execute on our long-term One NFP strategy and grow the business,” said Douglas W. Hammond , president and chief operating officer of NFP. The board expects to appoint Hammond chief executive of NFP when Bibliowicz steps down from that role in May.

“We are pleased to have this opportunity to invest in NFP and help the company advance its strategy,” said Vahe Dombalagian, a managing director at Madison Dearborn. “We fully support NFP’s focus on providing high-quality and value-added services to all of its clients, including corporations, through a more unified brand across its business segments.”

The transaction is expected to close in the third quarter.

National Financial Partners is a provider of benefits, insurance and wealth management services. Madison Dearborn Partners LLC is a private equity investment firm.

Products April 17, 2013

Annuity From The Principal Addresses Longevity

The Principal Deferred Income Annuity, a new product, offers a flexible premium and the option to delay the start of income payments.
Reported by

The firm said the annuity takes a flexible approach to creating a lifetime stream of income in retirement. Because the annuitant can decide on the length of the deferral period, income payments could potentially factor in a higher rate of return than other fixed-interest rate products. The annuity offers a flexible premium and the option to delay the start of income payments, anywhere from 13 months to 30 years.

“There is a feature that allows the owner to accelerate or delay income payments one time based on their needs,” Jerry Patterson, senior vice president of retirement incomestrategy at the Principal Financial Group, told PLANADVISER. “If elected, the income payment is recalculated, and current rates are one of several factors considered in calculating the new income payment.”

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Pointing to research that says 10,000 Baby Boomers turn 65 everyday, The Principal said its aim is to offer financial professionals a range of options to help clients turn retirement savings into guaranteed lifetime income. The Principal Deferred Income Annuity is for retirees who want to lock in a guaranteed income stream but do not need to start receiving it until later.

“The Boomers are redefining retirement,” Patterson said. “Many need options for guaranteeing retirement income that match their unique circumstances.”

The Principal Deferred Income Annuity is a tool for financial professionals to help clients transition from receiving a regular paycheck during their working years to creating a paycheck from their retirement savings guaranteed to last for the rest of their lives, Patterson said. The Principal looks to help strike the balance between the need for guarantees and the need for continued growth.

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