Tiptree Financial and Fortegra Financial Corporation have jointly announce the signing of a merger agreement pursuant to which Tiptree will acquire Fortegra in an all cash transaction valued at approximately $218m.

In the transaction, shareholders of Fortegra will receive $10.00 in cash for each share of Fortegra common stock they own. The price represents a premium of 42.5% to the closing price of Fortegra on August 11, 2014, the last trading day prior to this announcement.

Tiptree’s President and CEO Geoffrey N. Kauffman said: "We are very pleased to announce the addition of Fortegra to the Tiptree family of companies. Rick and his team have built a deep and experienced organization with a very strong market position and we are looking forward to working closely with them to take advantage of future growth opportunities and drive value for all shareholders."

"This transaction allows Fortegra to continue to serve our customers as we have for the past thirty-six years. We will continue to operate as we have in the past, as part of a public company, only now with a partner that views their investment as permanent capital. We were also able to allow our shareholders to realize significant, immediate value," said Richard S. Kahlbaugh, Chairman, President and CEO of Fortegra.

The Boards of Directors of both companies, including an independent special committee of the Fortegra Board, have unanimously approved the transaction. Following the execution of the merger agreement, stockholders representing approximately 62% of the outstanding shares of Fortegra common stock executed a written consent adopting and approving the merger agreement.

No additional stockholder approvals are necessary to adopt the merger agreement or consummate the transaction. The merger agreement includes a 30-day "go-shop" period during which the special committee of the Fortegra Board of Directors, with the assistance of its independent financial and legal advisors, will actively solicit, receive, evaluate and potentially enter into negotiations with interested parties that offer alternative proposals.

It is not anticipated that any developments will be disclosed with regard to this process unless Fortegra’s special committee makes a decision with respect to a potential superior proposal. There are no guarantees that this process will result in a superior proposal.

Tiptree and Fortegra expect to complete the transaction in late 2014 or early 2015 after satisfaction of customary closing conditions, including, among other things, insurance regulatory approvals and expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. There is no financing contingency.

Upon completion of the transaction, Fortegra common shares will no longer be registered with the SEC nor trade on the NYSE.

RBC Capital Markets, LLC acted as lead financial advisor and Wells Fargo Securities, LLC acted as financial advisor and lead financing arranger to Tiptree.

Willis Capital Markets & Advisory acted as financial advisor to Fortegra and rendered a fairness opinion (subject to the assumptions, qualifications and limitations set forth therein) to its Board of Directors in conjunction with this transaction.

Schulte Roth & Zabel LLP and Debevoise & Plimpton LLP served as legal counsel to Tiptree. Kilpatrick Townsend & Stockton LLP served as legal counsel to Fortegra.