Kin Insurance, Inc. and Omnichannel
Acquisition Corp. (NYSE: OCA) Enter Into Business Combination
Agreement; Transaction Implies An Approximate $1.03 Billion
Combined Company Pro Forma Enterprise Value
Kin Also Announces Plans for National
Expansion; Signs Agreement to Acquire Inactive Insurance Carrier
with Licenses in More than 40 States
Kin’s Proprietary Technology Draws Upon
Thousands of Data Points to Underwrite Home Insurance in Minutes -
Without an Agent - Even in Challenging Climate-Impacted
Geographies
Transaction Includes Commitment for $80
Million PIPE Led by HSCM Bermuda and Senator Investment Group, with
participation from Gillson Capital, Park West Asset Management and
other institutional investors
New Strategic Investors Include Joe Plumeri,
Former Chairman and CEO, Willis Group Holdings; Stephen Ross, Jeff
Blau and Bruce Beal of Related Companies, the most prominent
privately-owned real estate firm in the United States; and Gary
Vaynerchuk, CEO of VaynerMedia
Previous Series C Investors Include NBA
All-Star Draymond Green and Four-Time Major Champion Golf Pro Rory
McIlroy; Both Back Kin to Raise Brand Profile Across the
Country
Kin Insurance, Inc. (“Kin”), an insurance technology company
that makes home insurance easy and affordable, and Omnichannel
Acquisition Corp. (NYSE: OCA) (“Omnichannel”), a publicly-traded
special purpose acquisition company led by serial entrepreneur Matt
Higgins and a deep bench of consumer operators, announced today
that they have entered into a definitive business combination
agreement. Upon closing of the transaction, the combined company
will be named Kin Insurance, Inc. and is expected to be listed on
the NYSE under the new ticker symbol “KI”.
Kin, which currently operates in Florida, Louisiana and
California, also announced today it has accelerated its ability to
enter into new markets by signing a stock purchase agreement to
acquire an inactive insurance carrier that holds licenses in more
than 40 states. The proposed acquisition of the inactive insurance
carrier and the business combination are both expected to close in
the fourth quarter of 2021 following the satisfaction of customary
closing conditions, including regulatory approval, and in the case
of the business combination, shareholder approval. As Kin looks to
soon expand its reach into new markets, the company announced NBA
superstar Draymond Green joined four-time major champion golf pro
Rory McIlroy in the recent Series C round as an investor, both of
whom will assist in raising Kin’s profile across the country in
current markets and in new geographies.
Company Overview
Kin is the only pure-play direct-to-consumer digital insurer
focused on the complex and growing $100+ billion homeowners
insurance market. Kin’s proprietary technology enables customers to
insure their homes in minutes online, bringing convenience to a
historically manual process. Future customer needs such as making a
policy change or filing a claim are similarly automated and
convenient. Behind the scenes, Kin utilizes thousands of data
points about each property to provide accurate pricing and produce
better underwriting results.
Because Kin has eliminated the need for an external agent and
has replaced antiquated insurance technology with modern, more
efficient technology, Kin can offer attractive pricing to customers
without sacrificing margins.
Kin’s low cost structure, fast reaction time and data advantage
enable Kin to adapt better to the increasingly volatile weather
occurring throughout the country as the climate warms. The
residential property market cannot function without homeowners
insurance, because insurance is required by most mortgage lenders.
By stepping into climate-impacted areas and offering cost-efficient
insurance priced with sophisticated climate models, Kin plays a key
part in helping our society adapt to climate change.
Kin appeals to customers of all ages, with an average customer
age of 57, unusual for direct to consumer brands, which typically
service younger customers. Kin’s customers have relatively high
spending power, are embracing technology and generally recommend
businesses they love to their friends and family. This provides Kin
with a wealth of future cross-sell opportunities for existing and
new customers with respect to potential additional home-related and
insurance products.
Management Comments
“The home insurance industry has been coasting for years on
legacy technology and an antiquated way of interacting with
customers. It is more than ripe for an innovative alternative and
that is exactly why we created Kin – to provide customers with a
better home insurance offering, better pricing and an overall
better experience,” said Sean Harper, Co-founder and Chief
Executive Officer of Kin.
“Access to affordable home insurance is challenging in regions
that are impacted by climate change and severe weather; at Kin, our
proprietary technology and deep data advantage enables us to best
evaluate risk and price home insurance fairly for consumers. Our
customers receive a simple, direct and exceptional experience that
provides them with real savings and leaves them delighted and loyal
to Kin. As a result, we are growing fast, generating attractive
unit economics, and we believe we are well-positioned to
significantly expand our market share moving forward.”
“Today’s announcement is a major milestone and validation of
what we have built, as well as an important next step in our
development,” continued Mr. Harper. “We are excited to enter the
public markets with Matt Higgins and the incredible team at
Omnichannel, who have a proven track record of building enduring
direct-to-consumer brands, making them the perfect complement for
Kin. We expect to use our strengthened balance sheet to further
scale our platform to new geographies, accelerating the growth of
our premiums and profitability. Consumers deserve an easy,
affordable and personalized insurance experience, and at Kin, we
are building the home for better insurance.”
“The Kin team has leveraged their decades of insurance and
fintech experience to build a capital efficient company that is
experiencing outstanding growth across the board, along with
compelling and superior unit economics,” said Matt Higgins,
Chairman and CEO of Omnichannel, who also co-teaches a course on
digitally native brands at Harvard Business School. “Kin’s
direct-to-consumer approach to insurance is a true differentiator
and provides it with a clear-cut advantage versus the competition.
As a result, Kin has an opportunity to reinvent and lead the
massive homeowners insurance marketplace. The Omni team is already
hard at work helping elevate Kin’s brand presence, expanding Kin’s
acquisition channels and layering in the most cutting-edge
acquisition tactics. The pandemic compressed years of ecommerce
adoption and upended industries overnight. Now the future belongs
to frictionless commerce, and the homeowner's insurance industry is
lagging way behind. We believe Kin is well positioned to capitalize
on that unmet demand for years to come.”
Kin Highlights
- Leading direct-to-consumer home insurance technology company
that is expected to more than triple written premiums in 2021 and
achieve over $400 million of total written premiums by end of 2023,
corresponding to a 5-year CAGR of 139%, and to more than quadruple
gross profit in 2021 compared to 2020
- Significant opportunity to further grow and scale in a vastly
underserved market
- Direct-to-consumer model, along with scalable technology, that
enables lower customer acquisition cost, resulting in a 7.9x
LTV/CAC in Kin’s current markets and superior unit economics, even
before factoring in numerous cross-sell opportunities
- Simple, personalized digital experience and ongoing engagement
ensures optimal customer satisfaction and retention as evidenced by
a 92% retention rate and a Net Promoter Score of 85 through the
quarter ended March 31, 2021
- Proprietary technology automates and optimizes underwriting and
a risk selection engine enables more competitive pricing while
sustaining lower losses
- Best-in-class leadership team with multiple decades of
experience in fintech and insurance to ensure a dynamic,
multi-faceted approach toward growing Kin
Transaction Highlights
The business combination reflects an estimated implied pro forma
enterprise value at closing of $1.03 billion, assuming no
redemptions by Omnichannel’s public stockholders. The transaction
is further supported by a fully committed $80 million PIPE at $10
per share of Class A common stock of Omnichannel led by HSCM
Bermuda and Senator Investment Group.
The transaction is expected to provide Kin with approximately
$242 million of cash at closing, which is in addition to the $80
million raised in the recent Series C financing. The funding will
be used to support Kin’s continued growth in existing markets,
expansion into new markets, new marketing channels and product
portfolio expansions including new insurance and home-related
products. Kin’s existing stockholders will be rolling 100% of their
equity into the combined company and are expected to own
approximately 74% of the combined company immediately following the
closing of the business combination, assuming no redemptions by
Omnichannel’s public stockholders. PIPE investors are expected to
own approximately 6% of the combined company, and Omnichannel
stockholders are expected to own approximately 16%.
The Boards of Directors of each of Omnichannel and Kin approved
the transaction. The transaction will require the approval of the
stockholders of Omnichannel and Kin, the effectiveness of a
registration statement to be filed with the Securities and Exchange
Commission (the “SEC”) in connection with the transaction, and the
satisfaction of other customary closing conditions, including the
receipt of certain regulatory approvals. The transaction is
expected to close in the fourth quarter of 2021.
Advisors
J.P. Morgan Securities LLC is acting as exclusive financial
advisor to Kin, and Latham & Watkins LLP is acting as its legal
counsel. Citigroup Global Markets Inc. is acting as capital markets
advisor to Omnichannel, and Winston & Strawn LLP is acting as
its legal counsel. J.P. Morgan Securities LLC and Citigroup Global
Markets Inc. acted as joint placement agents to Omnichannel on the
PIPE transaction, and Mayer Brown LLP is acting as legal counsel to
the placement agents.
Webcast Information
Investors may listen to a pre-recorded call regarding the
proposed business combination today at 9:00 am ET. Please visit
Kin’s investor relations website investor.kin.com to access the
webcast.
Investor Presentation
Additional information about the transaction, including an
investor presentation, will be available at investor.kin.com and
will be filed with the U.S. Securities and Exchange Commission (the
“SEC”) by Omnichannel as an exhibit to a Current Report on Form 8-K
prior to the call, and available on the SEC website at
www.sec.gov.
Investor Conference Call Information
Kin and Omnichannel will host a joint investor call regarding
the proposed transaction today at 9:00 am ET. The call may be
accessed by dialing (877) 407-4018 for domestic callers or (201)
689-8471 for international callers. Once connected with the
operator, please provide the conference ID of “13721202.”
A replay of the call will also be available today from 11:00 am
ET to 11:59 pm ET on August 2, 2021. To access the replay, the
domestic toll-free access number is (844) 512-2921 and participants
should provide the conference ID of “13721202.”
About Kin
Kin is the home insurance company For Every New Normal. By
leveraging proprietary technology, Kin delivers fully digital
homeowners insurance with an elegant user experience, accurate
pricing and fast, high-quality claims service. Kin offers
homeowners, landlord, condo, and mobile home insurance through the
Kin Interinsurance Network (KIN), a reciprocal exchange owned by
its customers who share in the underwriting profit. Because of its
efficient technology and direct-to-consumer model, Kin provides
affordable pricing and peer leading customer reviews without
compromising coverage. To learn more, visit
https://www.kin.com.
About Omnichannel Acquisition Corp.
Omnichannel Acquisition Corp. (NYSE: OCA) is a blank check
company whose business purpose is to effect a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or
similar business combination with one or more businesses. For more
information, please visit www.omnichannelcorp.com.
Important Information for Investors and Stockholders
This communication relates to a proposed business combination
(the “Business Combination”) between Omnichannel Acquisition Corp.
(“Omnichannel”) and Kin Insurance, Inc. (“Kin”). In connection with
the proposed Business Combination, Omnichannel intends to file with
the SEC a registration statement on Form S-4 that will include a
proxy statement of Omnichannel in connection with Omnichannel’s
solicitation of proxies for the vote by Omnichannel’s stockholders
with respect to the proposed Business Combination and a prospectus
of Omnichannel. The proxy statement/prospectus will be sent to all
Omnichannel stockholders, and Omnichannel will also file other
documents regarding the proposed Business Combination with the SEC.
This communication does not contain all the information that should
be considered concerning the proposed Business Combination and is
not intended to form the basis of any investment decision or any
other decision in respect of the Business Combination. Before
making any voting or investment decision, investors and security
holders are urged to read the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC in connection with the proposed Business
Combination as they become available because they will contain
important information about the proposed transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, proxy statement/prospectus
and all other relevant documents filed or that will be filed with
the SEC by Omnichannel through the website maintained by the SEC at
www.sec.gov. In addition, the documents filed by Omnichannel may be
obtained free of charge by written request to: Christine Pantoya,
Chief Financial Officer, Omnichannel Acquisition Corp., 485
Springfield Avenue #8, Summit, New Jersey 07901.
Forward-Looking Statements
This communication includes “forward looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
“forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,”
“expect,” “estimate,” “plan,” “outlook,” and “project” and other
similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. Such
forward looking statements include estimated financial information,
including insurance premium run-rate and enterprise software
revenue. Such forward looking statements with respect to revenues,
earnings, performance, strategies, prospects and other aspects of
the businesses of Omnichannel, Kin or the combined company after
completion of the Business Combination are based on current
expectations that are subject to risks and uncertainties. A number
of factors could cause actual results or outcomes to differ
materially from those indicated by such forward looking statements.
These factors include, but are not limited to: (1) the occurrence
of any event, change or other circumstances that could give rise to
the termination of the transaction agreement and the proposed
Business Combination contemplated thereby; (2) the inability to
complete the transactions contemplated by the transaction agreement
due to the failure to obtain approval of the stockholders of
Omnichannel or other conditions to closing in the transaction
agreement; (3) the ability to meet the NYSE’s listing standards
following the consummation of the transactions contemplated by the
transaction agreement; (4) the risk that the proposed transaction
disrupts current plans and operations of Kin as a result of the
announcement and consummation of the transactions described herein;
(5) the ability to recognize the anticipated benefits of the
proposed Business Combination, which may be affected by, among
other things, competition, the ability of the combined company to
grow and manage growth profitably, maintain relationships with
customers and suppliers and retain its management and key
employees; (6) costs related to the proposed Business Combination;
(7) changes in applicable laws or regulations; and (8) the
possibility that Kin may be adversely affected by other economic,
business, and/or competitive factors. The foregoing list of factors
is not exhaustive. You should carefully consider the foregoing
factors and the other risks and uncertainties described in the
“Risk Factors” section of Omnichannel’s Annual Report on Form 10-K,
and other documents filed by Omnichannel from time to time with the
SEC and the registration statement on Form S-4 and proxy
statement/prospectus discussed above. These filings identify and
address other important risks and uncertainties that could cause
actual events and results to differ materially from those contained
in the forward-looking statements. Forward-looking statements speak
only as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and Omnichannel and
Kin assume no obligation and do not intend to update or revise
these forward-looking statements, whether as a result of new
information, future events, or otherwise.
Nothing in this communication should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved.
Any financial and capitalization information or projections in
this communication are forward-looking statements that are based on
assumptions that are inherently subject to significant
uncertainties and contingencies, many of which are beyond
Omnichannel’s and Kin’s control. While such information and
projections are necessarily speculative, Omnichannel and Kin
believe that the preparation of prospective financial information
involves increasingly higher levels of uncertainty the further out
the projection extends from the date of preparation. The
assumptions and estimates underlying the projected results are
inherently uncertain and are subject to a wide variety of
significant business, economic and competitive risks and
uncertainties that could cause actual results to differ materially
from those contained in the projections. The inclusion of financial
information or projections in this communication should not be
regarded as an indication that Omnichannel or Kin, or their
respective representatives and advisors, considered or consider the
information or projections to be a reliable prediction of future
events.
Participants in the Solicitation
Omnichannel, Kin and their respective directors and executive
officers may be deemed participants in the solicitation of proxies
of Omnichannel stockholders with respect to the proposed Business
Combination. Omnichannel stockholders and other interested persons
may obtain, without charge, more detailed information regarding the
directors and executive officers of Omnichannel Acquisition Corp.
and their ownership of Omnichannel’s securities in Omnichannel’s
final prospectus relating to its initial public offering, which was
filed with the SEC on November 23, 2020 and is available free of
charge at the SEC’s website at www.sec.gov, or by written request
to: Christine Pantoya, Chief Financial Officer, Omnichannel
Acquisition Corp., 485 Springfield Avenue #8, Summit, New Jersey
07901.
Additional information regarding the interests of participants
in the solicitation of proxies in connection with the proposed
transaction will be included in the proxy statement / prospectus
that Omnichannel intends to file with the SEC.
No Offer or Solicitation
This communication does not constitute an offer to sell or
exchange, or the solicitation of an offer to buy or exchange any
securities, or a solicitation of any vote or approval, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation, sale or exchange would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of section 10 of the
Securities Act, or an exemption therefrom.
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