Reliance Global Group Inc. has submitted a request to the US Securities and Exchange Commission (SEC) to withdraw a public offering initially intended to fund the acquisition of Spetner Associates Inc. in a $13.7 million transaction.
Instead, the New Jersey-based insurance broker said it plans to raise capital through the sale of its Fortman Insurance subsidiary for $5 million. The company confirmed it has signed a non-binding letter of intent for the sale.
According to chief executive officer Ezra Beyman, the sale of Fortman would be completed at a higher price than what Reliance originally paid for the business.
Reliance originally acquired Fortman Insurance in 2019 for approximately $4.14 million. At the time, Fortman produced around $21 million in written premiums and $1.6 million in revenue.
The company said that since the acquisition, it has invested in modernizing Fortman’s operations and leadership structure, enabling it to negotiate a higher resale price in the pending $5 million transaction.
In January, Reliance filed a Form S-1 with the SEC outlining plans to fund the Spetner acquisition through a public offering. That agreement, signed last year, included terms to purchase 80% of the issued and outstanding shares of Spetner’s common stock.
Under the deal, Reliance agreed to pay $5.5 million in cash, issue common stock equivalent to a 9.9% beneficial ownership in Reliance at the time of issuance, and cover any remaining balance through promissory notes.
The original agreement with Spetner had proposed $8 million in upfront cash, but the structure was revised to reduce the initial payment to $5.5 million. Reliance said that the remaining balance would be settled through seller-financed promissory notes. This adjustment allowed the buyer to maintain transaction momentum while preserving cash reserves.
More than five months after the filing, Reliance requested to withdraw the registration statement, noting that no securities had been sold in relation to the offering during that time.
Spetner Associates operates the BenManage benefits enrollment platform, which supports voluntary employee benefits across a broad client base. The platform currently serves more than 85,000 employees across the United States, a notable increase from approximately 45,000 participants when the acquisition talks were first disclosed.
Reliance has estimated that the Spetner acquisition could nearly double its annual revenue, bringing it to approximately $28 million. The company also projected more than $4 million in adjusted EBITDA in 2024 from the transaction, making it one of the more financially significant deals in Reliance’s recent growth strategy.
The company said it continues to view Spetner as a cash-generating asset at both the subsidiary and parent levels. The transaction remains part of its growth strategy through acquisition, subject to financing.
Reliance previously regained compliance with Nasdaq’s minimum bid price requirement in 2023 after implementing a 1-for-17 reverse stock split. The share consolidation did not affect the percentage of ownership held by individual shareholders.
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