UPC Insurance Announced All Stock Merger With American Coastal

On 8/17/16, UPC entered into a Merger Agreement with RDX Holding (American Coastal’s parent)

• $674mm all-stock merger meant to qualify as a tax-free reorganization
• RDX members received 49% of the outstanding UPC common stock as of the closing
  • Implies $330mm(a) valuation for American Coastal or 9.0x 2015 net income / 1.70x TBV
• Dan Peed became non-executive Vice-Chair of UPC’s Board and nominated two directors
  • Peed was the CEO of ACIC and owns a majority of RDX stock
• John Forney, UPC’s President and CEO, assumed the role of CEO of the combined entity
• Transaction was subject to UPC shareholder approval and required regulatory approvals

Combination created combined entity with over $1 billion of premium in force

• Leading specialty personal and commercial lines property underwriter focused on coastal states
• Transaction immediately accretive to United’s earnings per share and ROE

American Coastal is the largest commercial residential insurer in Florida with $309mm DPW

• ACIC is a specialty underwriter focused primarily on FL commercial residential property
• Long-term exclusive agreement with AmRisc, largest commercial windstorm MGA in the US

Publicly-traded (UIHC), UPC was the 25th largest homeowners insurer in the U.S. for 2015(a)

• Specialized personal and commercial property cat writer
• Geographically diversified book of business
• Long track record of consistent underwriting profitability and strong returns on invested capital

TCMA acted as financial advisor to RDX and American Coastal

• Evaluated a broad set of strategic alternatives for American Coastal
• Introduced the counterparties
• Created the proposed transaction structure
• Performed financial analysis on the pro forma combination
• Performed reinsurance program analysis and synergy evaluation
• Assisted American Coastal in negotiation of final transaction terms