Cohen & Company subsidiary Insurance Acquisition Corp. has entered into a definitive merger agreement with automotive e-commerce firm Shift Technologies.
Following the transaction, Insurance Acquisition Corp. plans to change its name to Shift Technologies, Inc and it will remain NASDAQ-listed under a new ticker symbol.
The company will combine with Shift for aggregate consideration of around $380m in Insurance Acquisition Corp. Class A common stock.
This is in addition to another six million shares of Class A common stock that will be earned if the combined company achieves certain price targets over time.
In relation to the transaction, institutional investors including Fidelity Management & Research Company and ArrowMark Partners will purchase Insurance Acquisition Corp. Class A common stock worth $185m.
Following the transaction, the combined company is expected to retain up to $300mto support working capital and fund growth.
Insurance Acquisition Corp. Board of Directors chairmanDaniel Cohen said: “We are excited to partner with Shift and its world-class management team as it leverages its technology platform to disrupt the $840+ billion used car market.
“With its tremendous, ongoing success in its core markets, we believe that this merger and its accompanying capital infusion will enable Shift to expand its product offerings and execute on its growth strategies.”
Shift Co-CEO George Arison said: “Shift’s mission is to make car purchase and ownership simple. Merging with Insurance Acquisition Corp. is the next step in our evolution and will enhance our ability to scale our operations as we continue to deliver one of the industry’s broadest selections of used cars via our powerful technology platform.”
The boards of directors of both companies have approved the transaction, which is expected to be completed in the third quarter of this year.