On January 26, National Security Group Inc. (NSEC) along with VR Insurance Holdings Inc. announced a definitive merger agreement. According to the agreement, VR Insurance will acquire NSEC’s all outstanding common shares. Consequent to the news, NSEC stock skyrocketed in the premarket.
In the previous trading session, the stock was able to gain only 2.50% at $9.23 at a meager volume. Following the announcement, the stock was up by 74.44% at $15.70 premarket, at the time of writing, on Thursday.
The insurance products provider, The National Security Group Inc. was founded in 1947. Currently, the company has a market capitalization of $23.38 million with 2.53 million shares outstanding.
NSEC’s Merger Agreement
As per the agreement, at a per-share price of $16.35 VR Holdings will acquire NSEC’s all outstanding shares. Thus, 77% premium to its closing price per share on January 25, 2022. Moreover, the total value of the transaction is roughly $41.4 million.
Furthermore, the transaction has been unanimously approved by the Board of Directors of the company. Also, the company’s shareholders have been recommended to vote in favor of the transaction as required by the agreement.
Following the expected close of the transaction in Q2 of 2022, NSEC will become a private company. In addition, no sudden changes are expected in the company’s day-to-day operations as of yet.
Financial Overview
On November 12, the company declared its financial results for the quarter that ended on September 30, 2021.
In the quarter ended September 30, 2021, NSEC incurred a net loss of $644,000 against $778,000 in the year-ago period. Resultantly, the net loss per basic and diluted share was $0.25 and $0.30 in the quarter ended September 30, 2021, and 2020, respectively.
In addition, the company generated total revenue of $16,671,000 in the quarter ended September 30, 2021. Comparatively, the total revenue was $17,765,000 in the year-ago period.
NSEC’s Cash Dividend
On October 22, the company’s board had declared a cash dividend of $0.06 per outstanding common share. Further, the set record date for the quarterly cash dividend was November 08, 2021. And the dividend was payable on November 30, 2021.
Conclusion
In conclusion, the company’s shares have been gaining momentously on the company’s merger agreement. The company expects this merger to bring multiple new opportunities along with capital for its acceleration into its next stage of growth. In addition, NSEC is very hopeful and looks forward to the company’s expansion.
