Lakewood-based holding company to acquire Medigap Health

Acquisition will expand company's presence into the Medicare supplement insurance market

Lakewood-based Reliance Global Group said Wednesday it plans to acquire Medigap Health Insurance Co. in an asset purchase transaction. Reliance operates as a holding company with diversified interests in the insurance and real estate markets. The company is focused on acquiring growing, cash flow-positive insurance agencies.

The acquisition is expected to close during the first quarter of 2022 and is subject to customary closing conditions.

Medigap is an insurance brokerage company headquartered in Florida that specializes in Medicare supplement insurance. According to a news release, it generated revenue of approximately $7 million for the trailing 12 months ended Sept. 30.

Total consideration for Medigap is expected to be approximately $19.6 million, consisting of both cash and restricted common stock of Reliance Global Group.

“We are excited to announce the upcoming acquisition of Medigap, one of the nation’s fastest-growing providers of Medicare supplemental insurance coverage,” Ezra Beyman, CEO of Reliance Global Group, said in a prepared statement. “This planned acquisition would expand our capabilities within the Medicare supplement market, which we believe would be a perfect complement and highly synergistic with our existing portfolio companies. Importantly, this acquisition is consistent with our strategy of acquiring growing, cash flow-positive agencies at attractive multiples. In addition to bolstering our revenue by more than 70%, we believe this transaction has the potential to be highly accretive.”

Kyle Perrin will remain chief operating officer of Medigap.