SAN FRANCISCO, June 29, 2020 /PRNewswire/ -- Shift
Technologies Inc. ("Shift"), an e-commerce platform on a mission to
make car-buying convenient, fair, and accessible for everyone, and
Insurance Acquisition Corp. (Nasdaq: INSU), a publicly traded
special purpose acquisition company, today announced they have
entered into a definitive merger agreement whereby Shift will
combine with Insurance Acquisition Corp. In connection with
the closing of the transaction, Insurance Acquisition Corp. intends
to change its name to Shift Technologies, Inc. and remain
NASDAQ-listed under a new ticker symbol. The transaction is
expected to close in the third quarter of 2020.
Daniel Cohen, Chairman of the
Board of Directors of Insurance Acquisition Corp., commented, "We
are excited to partner with Shift and its world-class management
team as it leverages its technology platform to disrupt the $840+
billion used car market. With its tremendous, ongoing success in
its core markets, we believe that this merger and its accompanying
capital infusion will enable Shift to expand its product offerings
and execute on its growth strategies."
George Arison, Shift Co-CEO,
said, "Shift's mission is to make car purchase and ownership
simple. Merging with Insurance Acquisition Corp. is the next step
in our evolution and will enhance our ability to scale our
operations as we continue to deliver one of the industry's broadest
selections of used cars via our powerful technology platform. We
look forward to partnering in a transaction that provides an
efficient path for a successful transformation to a public
company."
Toby Russell, Shift Co-CEO added,
"Our high net promoter score demonstrates our success in delivering
a simple, satisfying car buying experience for consumers, and our
strong market penetration in our core markets demonstrates our
ability to effectively scale the business. We operate in a massive
market and we believe that there is a significant opportunity to
continue to rapidly grow our business. We are actively pursuing our
growth initiatives as we execute on our vision."
Following the close of the transaction, Shift's highly
experienced management team will continue to operate the combined
company.
Shift Highlights
Shift has built a leading automotive e-commerce company powered
by a unique technology platform that delivers a comprehensive and
seamless car ownership experience. Shift allows its customers
to buy, sell and finance cars in a simple, quick and enjoyable
process. Combining both a "buy it now" option for customers to
purchase a vehicle sight unseen with its unique concierge service,
that allows customers to request a test drive at their home or
work, as well as proprietary point-of-sale software, Shift enables
the discovery, test drive, purchase and financing of pre-owned
vehicles to consumers without visiting a physical place of
business. Leveraging its five regional reconditioning centers
and highly efficient consumer purchasing offering, Shift is able to
address the entire spectrum of used cars, regardless of sales
price, and do so with compelling unit economics.
Additional areas where Shift is focused, as it builds a leading
automotive e-commerce platform to the sale, purchase and financing
of used cars, include:
- Shift's differentiated strategy focuses on the largest segments
of the highly-fragmented used car market, offering one of the
broadest spectrums of used car inventory, including Value segment
offerings.
- Shift is the only automotive e-commerce platform to leverage a
patented system and method for managing on-demand test drives.
- By targeting urban, densely populated markets, Shift has used
machine learning and a "speed to lead" sales approach to grow its
market penetration to over 4% in its top-performing cities within
the San Francisco market. With
current operations in five markets, which together account for 8%
of the U.S. population, Shift has a significant runway for
continued expansion.
- 6.1% gross margin in 2019 demonstrates strong unit economics
driven by high-margin vehicle acquisition channels, optimized
inventory mix and ancillary product offerings, combined with
streamlined inventory onboarding, low fulfillment and
reconditioning costs, and centralized software.
-
- 90%+ of Shift's inventory is sourced from consumers and
partners, driving industry leading margins and low customer
acquisition cost.
- Data-driven vehicle evaluations ensure acquisition of the right
inventory at the right time reducing days to sale.
Additional information about Shift's operations can be found at
www.shift.com. In addition, information about Shift's operations
and financial performance is contained in the investor presentation
(the "Investor Presentation") furnished today by Insurance
Acquisition Corp. via a Current Report on Form 8-K with the
Securities and Exchange Commission (the "SEC"), which can be viewed
at the SEC website at www.sec.gov.
Transaction Overview
Insurance Acquisition Corp. will combine with Shift for
aggregate consideration of approximately $380 million in Insurance Acquisition Corp. Class
A common stock, plus an additional 6 million shares of Class A
common stock that will be earned if the combined company achieves
certain price targets over time. In connection with the
transaction, institutional investors, including Fidelity Management
& Research Company, LLC, and ArrowMark Partners, have committed
to a $185 million private purchase of
Insurance Acquisition Corp. Class A common stock that will close
concurrently with the business combination. Insurance Acquisition
Corp. has committed to register these private shares shortly
following the closing of the combination. The combined company will
retain up to $300 million of cash
following the transaction, which will be used to support working
capital and fund growth.
The boards of directors of both Insurance Acquisition Corp. and
Shift unanimously approved the transaction. The proposed
transaction is expected to be completed in the third quarter of
2020, pending stockholder approval of both Insurance Acquisition
Corp. and Shift, and is subject to customary regulatory and other
closing conditions.
Advisors
Wells Fargo is acting as
exclusive financial advisor to Shift and the Sole Placement Agent
to Insurance Acquisition Corp. Cantor Fitzgerald, Wells
Fargo, William Blair and Northland
Capital Markets are acting jointly as Capital Markets
Advisors. Jenner & Block is acting as legal advisor to
Shift. Morgan, Lewis & Bockius is acting as legal advisor to
Insurance Acquisition Corp. The Blueshirt Group is acting as
investor relations and public relations advisor to Shift.
Latham & Watkins is acting counsel to the Placement Agent for
this transaction. O'Melveny & Myers is acting as counsel to
Shift's stockholders.
Investor Conference Call
Today, June 29, 2020 at
8:00 a.m. ET, Shift and Insurance
Acquisition Corp. will host a joint investor conference call to
discuss the proposed transaction and review an investor
presentation, which will be filed with the SEC as an exhibit to a
Current Report on Form 8-K prior to the call, available on the SEC
website at www.sec.gov.
To listen to the prepared remarks, dial 888-203-1112, passcode:
8051299 through end of day on July 3,
2020. A transcript of the call will also be made available
on the SEC website at www.SEC.gov.
About Shift
Shift is an e-commerce platform on a mission to make car-buying
convenient, fair, and accessible for everyone. With instant quotes
and at-home pickup, Shift saves sellers time and money. Buyers have
access to Shift's bookable at-home test drives and white glove
service. Shift's 150+-point inspection and seven-day return
guarantee help consumers buy and sell with confidence. Since
raising its Series A in 2014 co-led by Emily Melton (Threshold, formerly DFJ) and
Manish Patel (Highland Capital),
Shift has raised equity from investors including Alliance Ventures,
BMW iVentures, certain funds managed by Goldman Sachs Asset
Management L.P., G2VP, DCM, Lithia and others. For more information
please visit https://shift.com/.
About Insurance Acquisition Corp.
Insurance Acquisition Corp. is a blank check company formed for
the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business
combination. Insurance Acquisition Corp. raised $150.6M in its initial public offering in
March 2018. The company's securities
are quoted on the NASDAQ stock exchange under the ticker symbols
INSU, INSUW and INSUU.
Caution Regarding Forward Looking Statements
This document 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.
Such forward looking statements with respect to revenues, earnings,
performance, strategies, prospects and other aspects of the
businesses of Insurance Acquisition Corp., Shift Technologies, Inc.
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
Agreement and Plan of Merger and the proposed business combination
contemplated thereby; (2) the inability to complete the
transactions contemplated by the Agreement and Plan of Merger due
to the failure to obtain approval of the stockholders of Insurance
Acquisition Corp. or other conditions to closing in the Agreement
and Plan of Merger; (3) the ability to meet Nasdaq's listing
standards following the consummation of the transactions
contemplated by the Agreement and Plan of Merger; (4) the risk that
the proposed transaction disrupts current plans and operations of
Shift Technologies, Inc. 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; (8) the possibility that Shift
Technologies, Inc. may be adversely affected by other economic,
business, and/or competitive factors; and (9) other risks and
uncertainties indicated from time to time in other documents filed
or to be filed with the Securities and Exchange Commission ("SEC")
by Insurance Acquisition Corp. You are cautioned not to place undue
reliance upon any forward-looking statements, which speak only as
of the date made. Insurance Acquisition Corp. and Shift
Technologies, Inc. undertake no commitment to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by law.
Additional Information
In connection with the proposed business combination between
Shift Technologies, Inc. and Insurance Acquisition Corp., Insurance
Acquisition Corp. intends to file with the SEC a preliminary proxy
statement / prospectus and will mail a definitive proxy statement /
prospectus and other relevant documentation to Insurance
Acquisition Corp. stockholders. This document does not contain all
the information that should be considered concerning the proposed
business combination. It is not intended to form the basis of any
investment decision or any other decision in respect to the
proposed business combination. Insurance Acquisition Corp.
stockholders and other interested persons are advised to read, when
available, the preliminary proxy statement / prospectus and any
amendments thereto, and the definitive proxy statement / prospectus
in connection with Insurance Acquisition Corp.'s solicitation of
proxies for the special meeting to be held to approve the
transactions contemplated by the proposed business combination
because these materials will contain important information about
Shift Technologies, Inc., Insurance Acquisition Corp. and the
proposed transactions. The definitive proxy statement / prospectus
will be mailed to Insurance Acquisition Corp. stockholders as of a
record date to be established for voting on the proposed business
combination when it becomes available. Stockholders will also be
able to obtain a copy of the preliminary proxy statement /
prospectus and the definitive proxy statement / prospectus once
they are available, without charge, at the SEC's website at
http://sec.gov or by directing a request to: Joe Pooler, Chief Accounting Officer, Insurance
Acquisition Corp., 2929 Arch Street, Suite 1703, Philadelphia, Pennsylvania 19104.
This document shall not constitute a solicitation of a proxy,
consent or authorization with respect to any securities or in
respect of the proposed business combination.
Participants in the Solicitation
Insurance Acquisition Corp. and its directors and officers may
be deemed participants in the solicitation of proxies of Insurance
Acquisition Corp. stockholders in connection with the proposed
business combination. Insurance Acquisition Corp. stockholders and
other interested persons may obtain, without charge, more detailed
information regarding the directors and officers of Insurance
Acquisition Corp. in Insurance Acquisition Corp.'s Annual Report on
Form 10-K for the fiscal year ended December
31, 2019.
Information regarding the persons who may, under SEC rules, be
deemed participants in the solicitation of proxies to Insurance
Acquisition Corp. stockholders in connection with the proposed
transaction will be set forth in the proxy statement / prospectus
for the transaction when available. 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 Insurance
Acquisition Corp. intends to file with the SEC.
Investor Relations:
Mark Roberts, Blueshirt Capital
Markets
mark@blueshirtgroup.com
Media Contact:
Jeff Fox, The Blueshirt Group
jeff@blueshirtgroup.com
415-828-8298
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SOURCE Shift