Abacus Life, a leading buyer of life insurance policies and a vertically-integrated alternative asset manager, has announced a merger agreement with East Resources Acquisition Company (ERES), a special purpose acquisition company (SPAC). Abacus will go public following the closing of the deal, which is expected in late 2022.
“We are thrilled to be partnering with East Resources on this significant milestone. They share our excitement about the opportunity ahead and bring invaluable expertise and knowledge in alternative investments,” Jay Jackson, Chief Executive Officer of Abacus Life, said in a statement. “This transaction is an important milestone and will assist in accelerating the scale of our platform to increase penetration into the growing $233 billion potential Annual Life Settlement market.”
Abacus purchases policies from consumers seeking liquidity and then actively manages them over time. It has had a 20% market share for more than 18 years and about 4x origination growth since 2016, with nearly $2.9 billion in face value of policies purchased between 2019 and 2021. It has helped thousands of clients maximize the value of their insurance policies, the company said, and has serviced $950 million in policies.
East Resources Acquisition Company – whose Chairman, Chief Executive Officer, and President, Terry Pegula, also owns the Buffalo Bills – was formed for the purpose of entering into mergers, asset acquisitions, stock purchases, or other business combinations with North American energy companies.
“We are very fortunate to have found such a great partner for the SPAC and more importantly for shareholders, a company that is a highly scalable sector market leader, underpinned by steady financial performance and strong growth potential,” Pegula said in a statement.
The combined entity will have an enterprise value of $618 million. Cash proceeds will consist of up to $98 million of cash held in ERES’s trust account, plus any additional cash raised via a private placement before closing. The net proceeds will enable Abacus to lower its cost of capital, scale its Hold Portfolio, and begin securitizing policy portfolios.