Citi to sell final Primerica stake

By Lou Whiteman
The Deal Pipeline Online, December 13, 2011

Citigroup Inc. said Tuesday, Dec. 13, it has launched a public offering of its remaining 8 million shares in one-time subsidiary Primerica Inc., completely unwinding a key component of former CEO Sandy Weill's financial services supermarket.

Citigroup Global Markets Inc. is acting as sole bookrunner on the offering, which at current prices would raise about $185.76 million. Citi's stake is held in Citi Holdings, a collection of businesses that was marketed for disposal during the economic downturn.

Duluth, Ga.-based Primerica was one of Weill's first acquisitions after taking over as CEO of New York-based Citigroup in 1988, a $1.2 billion purchase that moved Smith Barney and insurance firm A.L. Williams into the Citi fold.

But the company, which specializes in life insurance and other insurance products, was deemed noncore as part of Citi's restructuring in 2008 and placed in Citi Holdings as part of about $600 billion in businesses to be jettisoned to repay the bank's $45 billion government bailout.

Citi sold a 28% stake in Primerica to Warburg Pincus in 2009. In April 2010 Citi launched a $320 million initial public offering for the insurer that left it with about 40% of Primerica's shares. The bank has since been selling down its remaining stake, including most recently a November deal to sell 8.92 million shares back to Primerica for $22.42 apiece.

Warburg Pincus remains Primerica's biggest shareholder with a 22% stake. The company, which boasts a sales force of about 100,000, generated Ebitda of $335.26 million on sales of $1.11 billion in the 12 months ending Sept. 30.

Among the assets Citi Holdings is looking to sell is OneMain Financial, a consumer lending operation once known as CitiFinancial which has reportedly drawn significant interest from private equity firms. Citi in June offloaded a portfolio of private equity assets valued at $1.7 billion to a unit of AXA SA.