Shareholders in the life insurance stock Vericity (NASDAQ:VERY) got some downright pleasant news today as shares jumped over 95% in Tuesday morning’s trading. It was all thanks to one fantastic new development from iA Financial, who revealed plans to buy Vericity.
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The deal iA Financial brought to the table featured a $170 million price tag, which it plans to fun using current cash on hand. That’s going to take down its solvency ratio somewhat, sending it down about 3%, but the full impact won’t be felt until the first half of 2024. That’s when the deal is expected to close. Once it does, iA Financial expects the acquisition to add somewhat to core earnings per share (EPS) figures in the second year, and to full EPS figures sometime in the third year after purchase.
Vericity’s CEO, James Hohmann, noted that the transaction was “exciting,” and would ultimately “…offer compelling value for all of our stockholders.” Hohman also noted that the move would help Vericity grow its eFinancial platform as well as the business itself by opening up an array of new opportunities for its product line. It’s clear iA was interested; reports note the $170 million offered represented a 101% premium to Vericity’s share price on October 2, 2023.
Is Vericity Stock a Good Buy Right Now?
A look at the last five days of trading for Vericity shows that the news came at just the right time for Vericity. The graph was fairly normal, though trending downward. At least, it was until this morning, when the stock surged nearly vertical to reach the new ceiling established by iA Financial’s purchase price.
