Exclusive: South Korean insurer DB walks away from potential Fortegra acquisition

By James Thaler

July 7 - (The Insurer) - DB Insurance has halted its pursuit of Fortegra after months of negotiations to acquire the US-based specialty insurer owned by Tiptree and Warburg Pincus, three senior independent sources confirmed to The Insurer.

Exact details on the reasoning for the breakdown in sale talks between Fortegra’s owners and management and South Korean insurer DB Insurance could not immediately be confirmed, but sources described the decision to walk away as multi-faceted. It is unclear whether the decision to exit negotiations is permanent or whether the potential transaction could be revisited in the future.

The Insurer was the first to report in January that Fortegra and its owners were set to explore a sale process for the company after aborting its second attempt at an IPO a year ago.

At the time, The Insurer reported that Fortegra, its owner Tiptree, and private equity sponsor Warburg Pincus had hired investment banks Barclays, KBW and BofA Securities for a sale process.

DB Insurance confirmed last week in a securities filing in its home country the Republic of Korea that it had completed its due diligence for an acquisition of Fortegra, and that it remained in negotiations.

In the filing, it added that Fortegra was "under review" as part of its strategy to expand in the U.S. and said it would provide further disclosure when the relevant matters are decided "or within one month", based on a Google translation.

Fortegra originally kicked off the sale process after initially receiving inbound interest from DB Insurance for a potential deal. DB Insurance is part of South Korean conglomerate DB Group.

It was not immediately clear what additional steps Fortegra’s backers plan on taking, and whether after a number of IPOs this year that have included Aspen and Ategrity whether the company would endeavor on its third attempt to list publicly.

Fortegra declined to comment. Warburg Pincus and DB did not immediately respond to a request for comment.