Acquisition Will Make Fortis Benefits a Leader in the Dental Benefits Market
NEW YORK, NY, July 10, 2001—Fortis, Inc., part of the international financial services provider Fortis [BSE: FOR and AMS: FOR], today announced that its board of directors has approved a definitive agreement under which Fortis, Inc. will purchase Protective Life Corporation's (NYSE: PL) Dental Benefits Division, in a transaction valued at approximately $300 million. The transaction will include the reinsurance of Protective's Dental Benefits Division's indemnity dental business and the purchase of the Division's prepaid dental subsidiaries. Fortis, Inc., on behalf of its group life, disability and dental benefits affiliate based in Kansas City, Missouri, ("Fortis Benefits"), intends to finance the acquisition with cash on hand.
The acquisition will be accounted for as a purchase and is expected to be immediately accretive to Fortis, Inc.'s earnings. The companies anticipate that the transaction can be completed in the fourth quarter of 2001, subject to customary closing conditions.
J. Kerry Clayton, president and chief executive officer of Fortis, Inc., said, "This transaction will position Fortis Benefits as the leader in the rapidly-growing voluntary (employee-paid) dental benefits market and the nation's fourth-largest provider of dental benefits. Our combination with Protective's Dental Benefits Division will create significant benefits for our customers, including a broader selection of attractively priced products and services. We're also excited about the opportunity to improve access to dental care by helping small employers establish voluntary dental plans for their employees. This acquisition reaffirms Fortis, Inc.'s ongoing commitment to build and manage a select portfolio of U.S. specialty businesses that are leaders in their respective markets and provide peace of mind to our customers by offering unique products and services that meet their needs."
Michael J. Peninger, president of Fortis Benefits, said, "Protective's Dental Benefits Division's product breadth, distribution strength and well-developed provider network will add tremendous value to our dental benefits business. We are delighted to welcome their talented people onto our team. Additionally, Protective's specialized, highly experienced sales force will complement our existing sales and distribution capabilities and increase the size of our sales organization by 50 percent.
"This combination will allow us to accelerate the achievement of our growth objectives while continually improving the quality and efficiency of our core operations. We expect our competitive market position to yield a stable and predictable earnings stream that will enhance Fortis Benefits' contribution to Fortis, Inc.'s financial strength and profitability," continued Mr. Peninger.
Chris Calos, senior vice president of Protective's Dental Benefits Division, said: "Fortis Benefits will give our dental benefits division a solid platform for growth, as well as the additional opportunities and resources that come from being part of a large global organization. Together, we will be able to build on our proven track record of success and market leadership to bring new benefits to our customers and employees alike. We look forward to working with Fortis Benefits' management team to achieve a smooth and rapid integration of our businesses."
Credit Suisse First Boston is acting as financial advisor to Fortis, Inc. and Alston & Bird LLP is providing legal counsel to Fortis, Inc.
About Fortis Benefits
Fortis Benefits, based in Kansas City, Mo., specializes in non-medical group employee benefits. Fortis Benefits' group product offerings include long-term and short-term disability, life and accidental death and dismemberment coverage and dental insurance. Fortis Benefits also offers voluntary (employee-paid) long-term disability, short-term disability, life and dental plans. Underwriting flexibility allows Fortis Benefits to develop tailor-made benefit plans for groups of any size. For more information, visit the company's website at www.fortisbenefits.com.
About Fortis, Inc.
Fortis, Inc. is a financial services company that, through its operating companies and affiliates, has built leadership positions in a number of specialty insurance market segments in the U.S. The companies of Fortis, Inc. are leading providers of individual, temporary and small group health insurance; group disability, life and dental insurance; preneed funeral insurance; credit related insurance products and services; and membership and extended service programs. For more information, visit the company's website at www.us.fortis.com.
Fortis, Inc. is part of Fortis, an international financial services provider active in the fields of insurance, banking and investment. Fortis employs approximately 70,000 people worldwide and offers a broad range of financial services. In its home market, the Benelux countries, Fortis occupies a leading position and offers a broad range of financial services to individuals, companies and the public sector. Outside its home market, Fortis concentrates on selected market segments. At year-end 2000, Fortis had total assets in excess of $410 billion. As one of the world's largest financial services companies, Fortis ranks 26th on the Fortune 'Global 500' and 33rd on the Forbes 'World Super 50' (July 24, 2000). For more information, visit the company's website at www.fortis.com.
About Protective's Dental Benefits Division
Protective's Dental Benefits Division is an industry leader in the indemnity dental market and for many years has been a pioneer in developing voluntary dental indemnity products for the payroll deduction segment of the marketplace. For the year 2000 the Division had assets (excluding goodwill) of approximately $150 million and revenues of $334.4 million. The Division has approximately 620 employees and 29 field sales locations. Protective's Dental Benefits Division provides group dental benefits to more than two million members nationwide. As of March 31, 2001 Protective's Dental Benefits Division had in force premiums of $336.6 million. For more information about Protective visit www.protective.com.
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