Item 2.01. Completion of Acquisition or Disposition of Assets.
On December 20, 2021, Independence Holding Company (the "Company") completed its
previously announced sale of all of the outstanding shares of common stock of
its wholly-owned subsidiary Independence American Holdings Corp. ("IAHC"), which
owns all of the capital stock of Independence American Insurance Company, and
the Company's remaining pet assets to a subsidiary of Independence Pet Holdings,
Inc. (f/k/a Iguana Capital, Inc.) ("Independence Pet") (the "IAHC Sale"),
pursuant to the Stock Purchase Agreement, dated May 17, 2021 (the "IAHC Purchase
Agreement"), by and among the Company's subsidiaries AMIC Holdings, Inc. and
Madison Investors Corp., the Company, an affiliate of Independence Pet and JAB
Holdings B.V. (solely for limited purposes). As previously announced, the
Company completed the sale of its 85% interest in PetPartners, Inc. to a
subsidiary of Independence Pet (the "PPI Sale") on June 30, 2021. The IAHC Sale
and PPI Sale together constitute the sale of a controlling interest in the
Company's pet division.
The Company received 70% of the IAHC Sale consideration in cash, or $197.7
million (inclusive of adjustments for estimated excess statutory capital and
surplus), and 30% of the IAHC Sale consideration in shares of capital stock of
Independence Pet valued at approximately $84.7 million.
The foregoing does not purport to be a complete summary of the IAHC Sale or the
IAHC Purchase Agreement and is qualified in its entirety by reference to the
full text of the IAHC Purchase Agreement, which was filed as Exhibit 10.16 to
the Company's Quarterly Report for the period ended June 30, 2021 filed with the
Securities and Exchange Commission on August 9, 2021 and is incorporated by
reference as if fully set forth herein.
Item 5.02. Departure of Directors or Certain O?cers; Election of Directors;
Appointment of Certain O?cers; Compensatory Arrangements of Certain O?cers.
The Compensation Committee of the Board of Directors of the Company approved a
bonus in the amount of $500,000 payable to Ms. Teresa A. Herbert, the Company's
President, upon the consummation of IAHC Sale.
Item 9.01. Financial Statements and Exhibits.
(b)Pro forma financial information
The (i) Pro Forma Condensed Consolidated Balance Sheet of IHC at September 30,
2021, as if the IAHC Sale had occurred as of that date, (ii) Pro Forma Condensed
Consolidated Statements of Income of IHC for the nine months ended September 30,
2021 and year ended December 31, 2020, as if the IAHC Sale had occurred as of
the beginning of the periods, and (iii) Pro Forma Condensed Consolidated
Statements of Income of IHC for the year ended December 31, 2019, as if the IAHC
Sale was reported as discontinued operations for that period, and the related
notes thereto, are filed herewith as Exhibit 99.2 and incorporated herein by
reference.
(d)
Exhibit 10.1 . Stock Purchase Agreement, dated May 17, 2021, by and among
Independence Holding Company, Madison Investors Corp., AMIC Holdings, Inc.,
Iguana Acquisition LLC and JAB Holdings B.V. (Filed as Exhibit 10.16 to our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 and
incorporated herein by reference).
Exhibit 99.1 . News Release of Independence Holding Company dated December
20, 2021 announcing the Completion of the Sale of a Controlling Interest in its
Pet Division and the Stock of Independence American Insurance Company.
Exhibit 99. 2 . The (i) Pro Forma Condensed Consolidated Balance Sheet of
IHC at September 30, 2021, as if the IAHC Sale had occurred as of that date,
(ii) Pro Forma Condensed Consolidated Statements of Income of IHC for the nine
months ended September 30, 2021 and year ended December 31, 2020, as if the IAHC
Sale had occurred as of the beginning of the periods, and (iii) Pro Forma
Condensed Consolidated Statements of Income of IHC for the year
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ended December 31, 2019, as if the IAHC Sale was reported as discontinued
operations for that period, and the related notes thereto.
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