Quotesmith.com, Darien, Ill., has reached a definitive agreement to acquire the assets of privately held Life Quotes Inc., an Evergreen, Colo.-based life insurance agency. Terms of the agreement were not disclosed. Quotesmith.com also has agreed to sell 2.36 million shares of its common stock to Zions Bancorporation for $5.50 net per share, thus raising $13 million in new capital, which is contingent upon the closing of the Life Quotes asset acquisition. After the completion of this capital transaction, Quotesmith.com will have 7.3 million outstanding common shares, with Zions holding a 32% equity interest and one board seat.
The Life Quotes acquisition is expected to double the revenues of Quotesmith.com and accelerate the Company's path to profitability. The combined firm will serve an installed customer base of 200,000 policyholders.
These agreements, which are subject to shareholder approval, are expected to close in the second quarter of 2004. Members of the Quotesmith.com management team holding more than 60% of the firm's outstanding capital stock have indicated their intention to vote in favor of these transactions at an upcoming shareholders' meeting.
Life Quotes employs 80 insurance professionals and will continue to be operated as a stand alone profit center in Evergreen, Colo. by current management, with the exception of Ken Manley, Life Quotes founder and president, who will retire from day-to-day management of the company.
Life Quotes had revenue of approximately $10.4 million in 2003 and is profitable. As previously reported in its year-end financial release, Quotesmith.com had cash and investments totaling $15.2 million as of December 31, 2003 with no debt.
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