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Echelon Financial Holdings has announced that it has received final regulatory approval to sell its subsidiary, Echelon Insurance, to a subsidiary of CAA Club Group.
The multimillion dollar sale secured the majority approval of Echelon’s shareholders earlier this year. The shareholders also approved a reduction in Echelon Financial Holding’s stated capital, allowing for special distribution to shareholders.
A release said that the transaction is scheduled to be completed on or before May 31, 2019. The net proceeds to Echelon Financial Holdings are expected to be about $166 million (after adjustments and expenses).
“We are pleased to take this important step towards completing the sale of Echelon Insurance to a buyer that will support the continued growth of Echelon Insurance, and the employees behind its success,” commented Echelon Financial Holdings chairman Murray Wallace.
“We are excited to welcome Echelon Insurance to the CAA Club Group of Companies,” said CAA Club Group president and CEO Jay Woo, who added that Echelon Insurance will continue to grow by leveraging its expertise and market leadership in specialty and commercial insurance.
Following the closing of the deal and the special distribution payment, Echelon Financial Holding’s remaining material assets will be its 75% shareholding in The Insurance Company of Prince Edward Island, and a cash reserve of about $80 million.
