INSU Acquisition Corp. II

INSU Acquisition Corp. II

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Metromile

ENTERPRISE VALUE: $956.0 million
ANTICIPATED SYMBOL: MLE

Metromile, Inc., a leading digital insurance platform and pay-per-mile auto insurer, and INSU Acquisition Corp. II (NASDAQ: INAQ) announced today they have entered into a definitive merger agreement. Upon completion of the transaction, the combined company will operate as Metromile, and will be listed on the NASDAQ under the new ticker symbol “MLE”.

Metromile’s fully digital customer experience is designed for the modern driver. Customers sign up, access customer support and file claims through its mobile app. Claims are handled quickly and, in most cases, are fully automated. Exclusive features like street sweeping alerts and auto health tips engage drivers along the way. The result is a community of fiercely loyal customers who enjoy far more than price savings.

The Company is expected to receive up to $294 million in cash net of selling shareholders, debt repayment, and transaction expenses.


TRANSACTION

The transaction values the combined company at an enterprise value of approximately $956 million, which is 3.7x estimated ’22 revenues, 15.2x estimated ’22 gross profit, and 21.5x estimated ’22 contribution profit.

 


PIPE

  • $160M PIPE at $10.00 per share – 16,000,000 shares
  • Investors include:
    • Social Capital
    • Hudson Structured Capital Management Ltd., doing its re/insurance business as HSCM Bermuda (“HSCM”)
    • Miller Value
    • Clearbridge
    • Mark Cuban
    • Affiliates of the Company’s Sponsors (Insurance Acquisition Sponsor II, LLC and Dioptra Advisors II, LLC) has committed to purchase 1,500,000 PIPE Shares as part of the PIPE Investment.

EARNOUT

  • Company earnout: Additional 10 million Class A earn-out shares will be issued if closing stock price exceeds $15.00 per share for 20 out of any 30 consecutive trading days during the first 24 months
  • Two remaining 38.2%tranches of promote shares cannot be sold or transferred until a closing stock price of the shares exceeds $15.00 and $17.00 respectively, for any 20 trading days within a 30-day trading period following the business combination

LOCK-UP

  • The Company and certain Metromile stockholders – until the six-month anniversary of the closing of the Merger

SPONSOR SHARE CANCELLATION AGREEMENT

  • INSU II’s sponsor has additionally agreed to forfeit 1,177,000 promote shares and 5,100,334 will be converted into earnout shares. Half of these will also vest when the combined company’s shares trade at or above $15 for 20 of 30 days and the other half at $17.

INSU SPONSOR SHARES


NOTABLE CONDITIONS TO CLOSING

the Company will have at least $199 million in cash as of the closing, after:

  • Giving effect to the PIPE Investment
  • The redemption of the Company’s Class A common stock by the Company’s public stockholders
  • The payment of the transaction expenses of the parties
  • The payment of deferred underwriting fees and the repayment of certain Metromile indebtedness.

NOTABLE CONDITIONS TO TERMINATION

  • By mutual written consent of the Company and Metromile and in certain other limited circumstances, including if the Transactions have not been consummated by May 1, 2021.

ADVISORS

  • J.P. Morgan Securities LLC is serving as exclusive financial advisor to Metromile, and Cooley LLP is serving as legal counsel to Metromile in connection with the transaction.
  • Cantor Fitzgerald & Co., J.P. Morgan Securities LLC, Wells Fargo and Northland Capital Markets are acting as capital markets advisors to INSU II.
  • J.P. Morgan Securities LLC, Wells Fargo, and Allen & Company are serving as placement agents to INSU II and Latham & Watkins LLP is serving as legal counsel to the placement agents.
  • Ledgewood is serving as legal counsel to INSU II in connection with the transaction.

MANAGEMENT & BOARD


Executive Officers

John M. Butler, 44
President and Chief Executive Officer

Since October 2017, Mr. Butler has served as Head of U.S. Insurance Debt Strategy and Global ILS Platform for Cohen & Company LLC. Before that, from October 2012 to October 2017, Mr. Butler worked for Twelve Capital AG, a European asset manager specializing in investment in the insurance sector, where he served in various roles including Managing Partner & Head of Investment Management. From January 2010 to September 2012, Mr. Butler worked as Senior Underwriter managing the International Catastrophe and Terrorism reinsurance portfolios of Hannover Re Bermuda Ltd, a reinsurance company, and before that, from August 2002 to October 2009, he served in various roles with White Mountains Re, a reinsurance company. Mr. Butler began his career in 1997 as a Marine Underwriting Assistant at The Imperial Fire & Marine Re-Insurance Company. On a non-executive basis, since June 2020, Mr. Butler has served as Vice Chair of the Board of TCI Re, a reinsurance company headquartered in Puerto Rico, and since February 2020, he has held an advisory board position with Kovrr Inc., an Israel based insurance cyber risk analytics technology company. Mr. Butler holds an honors degree in Law from the University of London, is an Associate of the Chartered Insurance Institute of the UK, a member of the Insurance Institute of Ireland and is qualified as a Chartered Insurer.


Joseph W. Pooler, Jr., 55
Chief Financial Officer and Treasurer

Mr. Pooler has served as Chief Accounting Officer and Treasurer of Insurance Acquisition Corp., a special purpose acquisition company (Nasdaq: INSU), since March 2018. He has served as Executive Vice President, Chief Financial Officer and Treasurer of Cohen & Company Inc. since December 2009, as Cohen & Company, LLC’s Chief Financial Officer since November 2007 and as Chief Administrative Officer since May 2007. From July 2006 to November 2007, Mr. Pooler also served as Senior Vice President of Finance of Cohen & Company, LLC. From November 2007 to March 2009, Mr. Pooler also served as Chief Financial Officer of Muni Funding Company of America, LLC, a company investing in middle-market non-profit organizations. Prior to joining Cohen & Company, LLC, from 1999 to 2005, Mr. Pooler held key management positions at Pegasus Communications Corporation (now known as The Pegasus Companies, Inc. (OTC: PEGX)), which operated in the direct broadcast satellite television and broadcast television station segments. While at Pegasus, Mr. Pooler held various positions including Chief Financial Officer, Principal Accounting Officer and Senior Vice President of Finance. From 1993 to 1999, Mr. Pooler held various management positions with MEDIQ, Incorporated, including Corporate Controller, Director of Operations and Director of Sales Support.


 

Board of Directors

Daniel G. Cohen, 51
Chairman of the Board

Mr. Cohen has served as the Chairman of the Board of Insurance Acquisition Corp., a special purpose acquisition company (Nasdaq: INSU) since December 2018. Since February 21, 2018, Mr. Cohen has served as the Chairman of the board of directors and of the board of managers of Cohen & Company, LLC, and has, since September 16, 2013, served as the President and Chief Executive of the European Business of Cohen & Company Inc. (NYSE: COHN), a financial services company with approximately $2.65 billion in assets under management as of March 31, 2020, and as President, a director and the Chief Investment Officer of Cohen & Company Inc.’s indirect majority owned subsidiary, Cohen & Company Financial Limited (formerly known as EuroDekania Management Limited), a Financial Conduct Authority regulated investment advisor and broker dealer focusing on the European capital markets (“CCFL”). Mr. Cohen served as Vice Chairman of the board of directors and of the board of managers of Cohen & Company, LLC from September 16, 2013 to February 21, 2018. Mr. Cohen served as the Chief Executive Officer and Chief Investment Officer of Cohen & Company Inc. from December 16, 2009 to September 16, 2013 and as the Chairman of the board of directors from October 6, 2006 to September 16, 2013. Mr. Cohen served as the executive Chairman of Cohen & Company Inc. from October 18, 2006 to December 16, 2009. In addition, Mr. Cohen served as the Chairman of the board of managers of Cohen & Company, LLC from 2001 to September 16, 2013, as the Chief Investment Officer of Cohen & Company, LLC from October 2008 to September 16, 2013, and as Chief Executive Officer of Cohen & Company, LLC from December 16, 2009 to September 16, 2013. Mr. Cohen served as the Chairman and Chief Executive Officer of J.V.B. Financial Group, LLC (formerly C&Co/PrinceRidge Partners LLC), Cohen & Company Inc.’s indirect broker dealer subsidiary (“JVB”), from July 19, 2012 to September 16, 2013. He has been the Chairman of The Bancorp Inc. (“Bancorp”) and Chairman of the Executive Committee of Bancorp’s board of directors since its inception in 1999. Mr. Cohen is Vice-Chairman of Bancorp Bank’s board of directors and Chairman of its Executive Committee. He had previously been Chairman of Bancorp Bank’s board of directors from September 2000 to November 2003 and, from July 2000 to September 2000, had been Bancorp Bank’s Chief Executive Officer. Mr. Cohen has served as the Chief Executive Officer of FinTech Acquisition Corp. III since March 2017. Mr. Cohen served as a director and Chief Executive Officer of FinTech Acquisition Corp. II from May 2015 until July 2018. He previously served as a director of FinTech Acquisition Corp. I (“FinTech I”) from November 2013 until July 2016, as FinTech I’s President and Chief Executive Officer from August 2014 until July 2016, and as FinTech I’s Executive Vice President from July 2014 through August 2014. He previously served as Chief Executive Officer of RAIT Financial Trust (“RAIT”) from December 2006, when it merged with Taberna Realty Finance Trust (“Taberna”), to February 2009, and served as a trustee from the date RAIT acquired Taberna until his resignation from that position in February 2010. Mr. Cohen was Chairman of the board of trustees of Taberna from its inception in March 2005 until its December 2006 acquisition by RAIT, and its Chief Executive Officer from March 2005 to December 2006. Mr. Cohen served as a director of Star Asia, a joint venture investing in Asian commercial real estate, from February 2007 to February 2014 and as a director of Muni Funding Company of America, LLC, a company investing in middle-market non-profit organizations, from April 2007 to June 2011. Mr. Cohen is a member of the Academy of the University of Pennsylvania, a member of the Visiting Committees for the Humanities and a member of the Paris Center of the University of Chicago. Mr. Cohen is also a Trustee of the List College Board of the Jewish Theological Seminary, a member of the board of the Columbia Global Center in Paris, a Trustee of the Paideia Institute and a Trustee of the Arete Foundation.


John C. Chrystal
Director 

Mr. Chrystal has served as a director of The Bancorp, Inc. and the Bancorp Bank since 2013, and he previously served as Interim Chief Executive Officer of The Bancorp, Inc., and President of the Bancorp Bank, from January 2016 to June 2016. Mr. Chrystal has served as an independent director of MoneyLion, Inc. (a privately held financial wellness and consumer lending platform) since November 2016; an independent director of Regatta Loan Management LLC (a privately held, SEC-registered Investment Adviser) since 2015; and an independent director of the Trust for Advised Portfolios (a mutual fund series trust focused on multiple asset classes) since 2010. Mr. Chrystal was an independent director of Morgan Stanley Derivative Products, Inc. (an entity providing credit enhancement for select derivative transactions) from 2010 to 2017. Mr. Chrystal was an independent director of Javelin Mortgage Investments, Inc. (a mortgage real estate investment trust) from 2012 through its sale in 2016. From 2009 to 2012, Mr. Chrystal was a Managing Member of Bent Gate Advisors, LLC (a firm providing strategic advice to financial institutions); from 2005 through 2008 was the Chief Risk Officer of DiMaio Ahmad Capital (an investment management firm focused on corporate credit markets) and from 1993 to 2005 was a Managing Director with multiple Credit Suisse entities, with oversight of asset management and financial product functions.


Sasson Posner, 57
Director 

Since April 2016, Mr. Posner has been a managing director at Young America Capital, a broker/dealer, and an advisor for Extraordinary Re, a startup (re)insurance risk trading platform. Since December 2017 Mr. Posner served as senior advisor for Teneo Cobbs Allen, a joint venture between Teneo, a global CEO advisory firm, and Cobbs Allen, a risk management firm, providing alternative risk financing services, and insurance advisory and brokerage services to its corporate clients. Prior to that, from February 2012 to February 2016, Mr. Posner was a Managing Director at Deutsche Bank in the Pension & Insurance Risk Markets group, and from March 2006 to February 2012, a Senior VP mostly, with the Structured Sales team. Prior to Deutsche Bank, from 2003 to 2006, Mr. Posner was a Senior VP at Willis Re’s Capital Markets group, the reinsurance division of Willis Group, the predecessor of Willis Towers Watson, an advisory and brokering company. From 1998 to 2000, Mr. Posner was at Lehman Brothers/Lehman Risk Advisors where he was a Senior VP and originated and structured insurance related opportunities for Lehman Re, a Bermudian reinsurer wholly owned by Lehman Brothers. From 1995 to 1998, prior to Lehman Brothers, and upon graduating from the University of Chicago Graduate School of Business, Mr. Posner began his reinsurance career as reinsurance underwriter at Centre Re, a finite reinsurance company.


Sheila Nicoll, 65
Director

Ms. Nicoll has over 40 years of experience in the insurance/reinsurance industry, of which the last 12 have been with the Bermuda operations of the Sirius International Insurance Group (Nasdaq: SG), including serving as Chief Operating Officer for Sirius Bermuda Insurance Company since September 2016. Prior to joining Sirius she was the President of Olympus Reinsurance Company Ltd. from its formation in December 2001 until it went into run-off in 2008. Her career has included working in the London market as a Lloyd’s broker, in New York providing run-off services and in Bermuda as a senior broker for Johnson & Higgins and then Marsh & McLennan when it acquired J&H. Since September 2010, she has also served as Chairman of Argus Group Holdings Limited, an insurance and financial services company listed on the Bermuda Stock Exchange, and serves as a member of the Risk Committee and the People, Compensation & Governance Committee. Ms. Nicoll is a Fellow of the Chartered Institute of Insurance (FCII) and holds an MA in Chemistry from Oxford University.


Andrew Hohns, 42
Director 

Since April 2020, Dr. Hohns has served as founding member and Chief Executive Officer of Newmarket Investment Management, a registered investment advisor managing capital on behalf of institutional investors worldwide, targeting investments in structured opportunities sourced from a global network of banks and financial institutions. Newmarket was established in 2020 to acquire and assume management of Mariner Investment Group’s International Infrastructure Finance Company (IIFC) strategy, a platform co-founded by Dr. Hohns in 2013. Since the establishment of IIFC, Dr. Hohns has overseen transaction structuring and negotiation for more than $20 billion of notional risk transfer. He is a regular speaker at various industry conferences, with special expertise in topics related to infrastructure, securitization, socially responsible investment, impact investment, and development finance. Prior to joining Mariner, Dr. Hohns was a Managing Director at Cohen & Company. Dr. Hohns serves as Commissioner on the US Semiquincentennial Commission and as a member of the Board of Directors of UNICEF USA. Dr. Hohns holds a BS in Economics from the Wharton School at the University of Pennsylvania, a Masters in Liberal Arts from the School of Arts and Sciences at the University of Pennsylvania, and a PhD in Applied Economics and Managerial Sciences from the Wharton School at the University of Pennsylvania.