CFG Announces Strategic Transaction with Constellation

Columbian Financial Group Announces Strategic Transaction with Constellation

Binghamton, N.Y. (June 29, 2021) – Columbian Mutual Life Insurance Company (“Columbian”) today announced that its Board of Directors has unanimously approved a strategic transaction with Constellation Insurance Holdings, Inc. (“Constellation”). This includes the conversion of Columbian to a stock company and the issuance of all of its newly issued stock to Constellation pursuant to a sponsored demutualization. Constellation, an insurance holding company, is backed by Caisse de dépôt et placement du Québec (“CDPQ”) and Ontario Teachers’ Pension Plan Board (“Ontario Teachers’”), two of North America’s largest and premier long-term institutional investors.

Since 1882, Columbian has offered high-quality, affordable life insurance protection to consumers in all 50 states. Its affiliated companies have US$1.8 billion in assets and over 750,000 policyholders.

The strategic transaction provides for Constellation to invest up to US$100 million to fund cash payments to eligible policyholders and to significantly strengthen capitalization and financial ratings of Columbian. The transaction will help protect and enhance Columbian’s policyholder interests as well as allow for investments in the future growth of the business.

“Constellation’s investment is transformative from a strategic and financial perspective and provides access to long-term capital, improved balance sheet strength, stronger financial ratings and the ability to continue to invest in technology and automation” said Michael Fosbury, President and Chief Executive Officer, Columbian. “This investment from Constellation will allow Columbian to build on its longstanding strengths, including our brand, our market position in the life insurance segment, our distribution partnerships, and our culture of customer service, to capitalize on the significant growth opportunities in providing affordable protection products for the senior market. All stakeholders will benefit as this transaction positions the company for long-term success.”

“Columbian is an impressive company with significant growth potential. We look forward to partnering with Michael and the management team to significantly accelerate Columbian’s organic and inorganic growth trajectory and firmly position the company as a leader in targeted life insurance market segments” said Anurag Chandra, Constellation’s founder, Chairman and Chief Executive Officer. “This transaction and the recently announced Ohio National demutualization demonstrate the compelling value proposition Constellation offers to life and P&C insurers who are looking for access to long-term growth capital, enhanced ratings and scale efficiencies, while preserving their independent identity, brand, operations and culture.”

The transaction is anticipated to close in the first half of 2022, subject to regulatory and policyholder approvals. Following the closing of the transaction, Columbian will maintain its brand and leadership team, and the company’s offices will remain in Binghamton and Syracuse.

Eversheds Sutherland is serving as legal counsel to Columbian and its Board of Directors. Keefe, Bruyette & Woods (KBW), A Stifel Company is serving as financial advisor to Columbian and its Board of Directors. Milliman is serving as actuarial services provider to Columbian. Debevoise & Plimpton LLP is serving as legal counsel to Constellation.

ABOUT COLUMBIAN MUTUAL INSURANCE COMPANY
Since 1882, Columbian has provided value through quality, affordable life insurance protection.  Columbian’s consumer-oriented products are designed to make a positive difference in policyholder’s lives by enhancing financial security when needed most. The company is licensed in all 50 states, and has grown over the years through a series of strategic mergers and acquisitions. Columbian’s affiliated companies have $1.8 billion in assets and over 750,000 policyholders.

ABOUT CONSTELLATION
Constellation is an insurance holding company targeting acquisitions of life and P&C insurers based in North America, with the strategic intent of building a substantial, highly rated and conservatively managed multi-line insurance business backed by long-term institutional capital. Constellation’s founding investors and equal partners, CDPQ and Ontario Teachers’ are two of the largest long-term institutional investors in North America, managing a combined total of over CA$500 billion in net assets, including over CA$80 billion in private capital investments. For more information, visit constellationih.com

ABOUT ONTARIO TEACHERS'
The Ontario Teachers' Pension Plan Board (Ontario Teachers') is the administrator of Canada's largest single-profession pension plan, with CA$204.7 billion in net assets (all figures at June 30, 2020 unless noted). It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.5% since the plan's founding in 1990. Ontario Teachers' is an independent organization headquartered in Toronto. Its Asia-Pacific regional offices are in Hong Kong and Singapore, and its Europe, Middle East & Africa region office is in London. The defined-benefit plan, which is fully funded as of January 1, 2020, invests and administers the pensions of the province of Ontario's 329,000 active and retired teachers. For more information, visit otpp.com and follow us on Twitter @OtppInfo.

ABOUT CDPQ
At Caisse de dépôt et placement du Québec (CDPQ), we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public retirement and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at December 31, 2020, CDPQ’s net assets total CA$365.5 billion. For more information, visit cdpq.com, follow us on Twitter or consult our Facebook or LinkedIn pages.

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