FBL Financial Sells EquiTrust Life Insurance Co. for $440M

FBL Financial Group (NYSE:FFG) has agreed to sell its EquiTrust life insurance subsidiary to Guggenheim Partners for $440 million in cash so it can increase focus on its Farm Bureau life insurance company.

The divestiture is the latest by FBL Financial as it continues to execute strategies intended to enhance its financial foundation.

“The divestiture of EquiTrust Life will allow FBL Financial Group to increase focus on its very attractive Farm Bureau market, while reducing risk and increasing financial flexibility,” the company's CEO James Hohmann said on Friday.

Guggenheim is a private-equity company with more than $125 billion in assets under management. The EquiTrust business it is buying sells fixed and indexed annuities and life insurance nationally through independent agents and marketing organizations.

“Over the past 10-plus years, EquiTrust Life has grown into a significant presence in the independent distribution annuity marketplace making it attractive to potential acquirers who are looking to pursue that line of business,” Hohmann said.

The transaction is currently slated to close around Dec. 30, pending regulatory approval and other customary closing conditions. Bank of American (NYSE:BAC) is acting as FBL’s financial advisor.

In conjunction with the consummation of the transaction, FBL Financial plans to us some of its excess cash by redeeming $175 million of public debt and $50 million of affiliate debt, and repurchasing as much as $200 million of its stock.