HC2 Holdings, the parent of a broadcasting company that is paring down its over-the-air TV station roster under President/CEO Wayne Barr Jr., has completed the previously announced sale of its insurance segment.
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Continental Insurance Group Ltd. and its wholly-owned subsidiaries, Continental General Insurance Company and Continental LTC Inc., are now part of Continental General Holdings LLC, an entity controlled by Michael Gorzynski.
The total transaction value is approximately $90 million and consists of a combination of $65 million in cash plus securities, including certain assets of Continental.
Gorzynski, a HC2 director and beneficial owner of approximately 6.6% of the company’s outstanding common stock, is the managing member of MG Capital Management and has also served as Executive Chairman of Continental since October 2020.
“This divestiture marks another key milestone in the transformation of HC2. Going forward our focus will be on our three core operating segments – Infrastructure, Life Sciences and Spectrum – all of which have best-in-class assets that are well positioned to thrive,” said Avie Glazer, Chairman of HC2.
Glazer and Barr share duties held until one year ago by Philip Falcone, now associated with Sovryn Holdings. Under Falcone, HC2 was one of the biggest buyers of low-power TV stations. HC2 will continue to own assets deemed important to the company. Otherwise, sales have been ongoing — in particular, of unbuilt construction permits that face an upcoming deadline for getting on the air.
“The consummation of this deal increases the company’s financial flexibility, better supports our remaining assets and positions us to drive growth,” said Barr. “Over the last several months, we have refinanced our balance sheet and made a strategic acquisition of Banker Steel in our Infrastructure segment. We believe we are well positioned for growth and value creation in the years ahead.”
Gorzynski added, “I believe completing this transaction helps HC2 meet its key strategic objectives while positioning Continental to strategically expand its footprint and pursue new opportunities. We look forward to continuing to build a best-in-class organization that prioritizes policyholders.”
Duff & Phelps served as financial advisor to HC2 in connection with the transaction and issued a fairness opinion to the Board of Directors of HC2 in connection with this transaction. Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to HC2. Olshan Frome Wolosky LLP, Duane Morris LLP, and Roberts & Holland LLP served as legal advisors to Michael Gorzynski.
