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Reliance Global Group Announces LOI to Acquire National Insurance Agency With Over 145 Affiliated Offices Across 40 States
9:35 AM ET 9/9/20 | GlobeNewswire
Reliance Global Group Announces LOI to Acquire National Insurance Agency With Over 145 Affiliated Offices Across 40 States
LAKEWOOD, N.J., Sept. 09, 2020 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Reliance Global Group, Inc. (OTCQB: RELI) ("RELI" or the "Company"), today announced a fully executed letter of intent (LOI) to acquire a national insurance agency. The acquisition is expected to close before the December 31, 2020 fiscal year end subject to certain closing conditions, with due diligence well underway.
Ezra Beyman, CEO of Reliance Global Group, stated, "We are excited to announce this planned acquisition, which we believe will be a true game changer for our business. Specifically, the target agency reports over 145 affiliated offices in approximately 40 states nationwide. In addition, they have established relationships with over 120 well-known local and national carriers. The target agency has experienced steady organic growth and is generating over $150 million in recurring annual premiums. In addition, the audited financials for the company reflect over $2.5 million in net income in 2019, and we anticipate the transaction will be immediately accretive to our earnings. Moreover, the combination of this target acquisition with the cash flow of our existing portfolio, should ensure very strong, positive cash flow of the combined entities going forward."
"We have been working on this planned acquisition for several months and are in the process of an extensive due diligence review. We expect to achieve significant cost savings and other synergies as we integrate our organizations and leverage our existing nationwide infrastructure. We also expect to generate significant cost savings and efficiencies through our relationship with Nsure.com. Specifically, by implementing Nsure.com's artificial intelligence, robotic process automation (RPA) and automatic search for best rates, our goal is to create a digitally empowered and scalable insurance agency model to reduce costs and allow agents to focus almost exclusively on selling new policies."
"As I have stated in the past, we believe the insurance market is ripe for a strategic consolidation of undervalued agencies. The insurance broker/agency market in the U.S. for 2020 is valued at over $160 billion(1) , and yet remains highly fragmented. Historically, insurance agencies have also remained quite stable in almost any economy, and do not bear insurance risk, making this an attractive market segment. We have a successful track record closing and integrating every previously announced insurance agency LOI, and this represents our most ambitious and meaningful acquisition to date."
Mr. Beyman concluded, "As we continue to build scale and gain critical mass, we believe we expect to garner more attention on Wall Street. Notably, public companies in the InsureTech sector, such as Goosehead and Lemonade, have benefitted from what we view as attractive valuations. For this reason, we believe our unique 'clicks and bricks' approach will drive significant value for our shareholders."
About Reliance Global Group, Inc.
