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Credit agency speculates on what’s next for a Clearwater serial acquirer

Margie Manning

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Scott Perry, AmeriLife chairman and CEO

AmeriLife, a financial services company in Clearwater, has purchased American Benefits Exchange, an Austin, Texas specialty insurance provider.

Financial terms were not disclosed. It’s the most recent in a series of deals by AmeriLife, which markets and distributes life, health and retirement solutions, and has been one of the area’s most active acquirers.

However, Moody’s Investors Service expects a shift in strategy in 2021, with AmeriLife slowing its acquisition pace to focus more on integration and organic growth, Moody’s wrote in a Nov. 17 report that rated two loans, totaling as much as $125 million, that AmeriLife will use to fund deals.

A request for comment from AmeriLife on its strategy was pending return.

AmeriLife has completed a dozen deals in the past 12 months.


Closer look: AmeriLife deals

Nov. 18, 2020: American Benefits Exchange, which specializes in providing insurance solutions to federal, postal and state employees, as well as members of the United States Armed Forces and small businesses

Nov. 5, 2020: Forward Strategies insurance Brokers, a national leader in marketing annuities, life insurance, long-term care and hybrid products

Oct. 15, 2020: The Equita Group, one of the largest life insurance marketing organizations in the country

Oct. 6, 2020: Secure Administrative Solutions, a multi-product, third-party administrator

Sept. 29, 2020: Senior Healthcare Direct which operates a consumer-facing profile under the name of Medicare Bob

Sept. 23, 2020: Majority interest in The Achievement Group, a leading annuity and life organization

July 15, 2020: Combines two registered investment adviser firms, Brookstone Capital Management and FormulaFolios, to create a $6.5 billion RIA

May 2020: Pinnacle Financial Services, a full-service health, life, annuity and long-term care marketing organization

April 2020: Jack Schroeder and Associates, a Medicare plan distributor

February 2020:  J.D. Mellberg Financial, an annuity and retirement planning organization

January 2020: Stephens-Matthews Marketing, an insurance marketing organization

December 2019: Agent Support Group, a multi-company life insurance brokerage agency


AmeriLife is focused on partnering with independent insurance professionals, financial advisors and marketing organizations with solid foundations for growth, a news release said. That’s the case in the most recent deal as well.

“American Benefits Exchange is a well-rounded marketing company that has made its mark in life, health and annuity distribution, supplementing existing government benefit plans,” AmeriLife Chairman and CEO Scott R. Perry said in the news release. “Our partnership will support American Benefits Exchange’s mission by leveraging a holistic approach to product delivery and expanding the company’s distribution footprint.”

AmeriLife brings market-leading life, health and annuity products and best-in-class training and technology tools, said Brian Pearson, American Benefits Exchange president. He will continue American Benefits Exchange as president and also serve as principal and member of the AmeriLife Life & Health Brokerage Distributions division.

Moody’s said AmeriLife plans two incremental term loans to fund its deals, as well an equity contribution from Thomas H. Lee Partners, a private equity group that bought a major stake in AmeriLife in January. Incremental loans allow a borrower to add a new term loantranche, or increase the revolving credit loan commitments under an existing loan facility up to a specified amount under certain terms and conditions. 

Moody’s assigned a B2 rating to an $80 million incremental first-lien senior secured term loan and Caa2 rating to an incremental $45 million that AmeriLife intends to borrow under its privately placed second-lien senior secured term loan. Both are speculative grade ratings. Moody’s also has a stable rating outlook for AmeriLife.

Moody’s said its ratings reflect AmeriLife’s role as a market leader in selling health, life and other products to a growing senior population, especially in Florida. With the Covid-19 pandemic, AmeriLife is stepping up its investment in direct-to-consumer channels, Moody’s said. Last year’s purchase of investment advisory firm Brookstone Capital Management diversified the business.

Those strengths are offset by AmeriLife’s financial leverage, execution and risks associated with its acquisitions, Moody’s said. The credit agency also said AmeriLife, with about $247 million in revenue in the 12 months that ended June 30, is modest in size relative to rated insurance brokers and service companies, and that the current economic conditions are putting pressure on the company’s annuity and life insurance sales.

With the new loans, AmeriLife’s debt-to-EBITDA ratio — a ratio measuring the amount of income generated and available to pay down debt before covering interest, taxes, depreciation, and amortization expenses — will be above 7x, Moody’s said.

“AmeriLife’s financial leverage remains high for its rating category, leaving little room for error in managing its existing and newly acquired operations. While AmeriLife is pursuing several acquisitions in 2020, Moody’s expects the company to slow its acquisition pace next year to focus more on integration, organic growth and reducing its leverage below 7x through EBITDA growth,” the report said.

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