8-K
Porch Group, Inc. (PRCH)
Common stock, par value $0.0001
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date Earliest Event Reported):
April 5, 2021
PORCH GROUP, INC.
(Exact name of registrant as specifiedin its charter)
| Delaware | 001-39142 | 83-2587663 |
|---|---|---|
| (State or Other Jurisdiction<br><br> <br>of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 2200 1st Avenue South, Suite 300 | |
|---|---|
| Seattle, Washington | 98134 |
| (Address of Principal Executive Offices) | (Zip Code) |
(855) 767-2400
(Registrant’s telephone number,including area code)
Not Applicable
(Former Name or Former Address, if ChangedSince Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol(s) | Name of each exchange on<br><br> <br>which registered |
|---|---|---|
| Common stock, par value $0.0001 | PRCH | The Nasdaq Stock Market LLC |
| Warrants, each exercisable for one share of common stock at an exercise price of $11.50 per share | PRCHW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.01 Completion of Acquisition or Dispositionof Assets.
On April 5, 2021, Porch Group, Inc., a Delaware corporation (the “Company”), completed its previously announced acquisition of Homeowners of America Holdings Corporation, a Delaware corporation (“HOA”), pursuant to the terms of that Agreement and Plan of Merger, dated as of January 13, 2021 (the “Merger Agreement”), by and among the Company, HOA, HPAC, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and HOA Security Representative, LLC, solely in its capacity as the representative for the securityholders of HOA, pursuant to which, among other matters, Merger Sub merged with and into HOA, with HOA surviving as a wholly-owned subsidiary of the Company (the “Merger”).
Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of HOA common stock and each in-the-money option to acquire shares of HOA common stock was cancelled and converted into the right to receive a pro rata amount of (i) $100 million, as may be adjusted in accordance with the terms of the Merger Agreement, of which approximately $21.7 million is payable in Company common stock to HOA stockholders that are “accredited investors” (within the meaning of Rule 501(a) under the Securities Act of 1933, as amended (the “Securities Act”)) (for an aggregate amount of 1,292,430 shares of Company common stock issued in connection with the closing of the Merger) and (ii) up to 500,000 additional shares of Company common stock which are issuable contingent on the achievement of certain price thresholds with respect to the Company common stock within the two (2) year period following the Merger. In addition, certain key employees of HOA are entitled to grants of restricted Company common stock under the 2020 Porch Group, Inc. Stock Incentive Plan in an aggregate amount equal to $510,000 and as well as awards of up to an aggregate amount of 100,000 options to acquire Company common stock, in each case upon the terms and subject to the conditions of the Merger Agreement. In order to satisfy purchase price adjustments or indemnification claims in accordance with the Merger Agreement, $330,000 and $1,000,000, respectively, were held back from the aggregate cash consideration payable at closing.
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which was filed with the Securities and Exchange Commission (“SEC”) as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on January 14, 2021, and is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The Company issued the shares of common stock in reliance on the exemptions from registration afforded by Section 4(a)(2) and Rule 506 promulgated under the Securities Act.
Item 7.01 Completion of Acquisition or Dispositionof Assets.
On April 6, 2021, the Company issued a press release in connection with the acquisition of HOA. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
The information furnished in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The financial statements required to be filed under Item 9.01(a) of this Current Report on Form 8-K will be filed by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
The pro forma financial information required to be filed under Item 9.01(b) of this Current Report on Form 8-K will be filed by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.
(d) Exhibits
* This Exhibit is furnished herewith and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act except as otherwise expressly stated herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PORCH GROUP, INC. | ||
|---|---|---|
| By: | /s/ Martin L. Heimbigner | |
| Name: | Martin L. Heimbigner | |
| Title: | Chief Financial Officer |
Date: April 6, 2021
Exhibit 99.1
Porch Group ClosesHomeowners of America Acquisition, Creating One of the Largest InsurTech Companies
SEATTLE, April 6, 2021 -- PorchGroup, Inc. ("Porch” or “the Company") (NASDAQ: PRCH), a leading vertical software company reinventing the home services industry, successfully completed its previously announced acquisition of Homeowners of America (HOA), making Porch one of the largest Insurance Technology (InsurTech) companies.
HOA is a Managing General Agent and insurance carrier hybrid with high margins and a capital efficient reinsurance strategy which limits retained risk. HOA primarily operates in six states, including Texas, Arizona, North Carolina, South Carolina, Virginia, and Georgia. The company was founded in 2006 in Texas, a $10 billion homeowners insurance market, and was the 12^th^ largest home insurer in Texas in 2019. HOA is licensed to operate in 31 states, positioning it for nationwide expansion as part of Porch.
Porch acquired HOA for approximately $100 million, subject to customary purchase price adjustments, of which approximately $21.7 million is payable in Porch common stock.
“With HOA’s experienced management team and scale of effective insurance operations, combined with Porch’s homebuyer access and unique property data, we are positioned to scale into our InsurTech ambitions,” said Matt Ehrlichman, Porch founder, chairman and CEO. “We are looking to immediately provide value to current HOA agents and customers through our technology platform and expanded offerings to be more than just an insurance carrier, but the partner for the home. We expect HOA’s fit within our unique vertical software platform will provide rapid, scalable, and profitable growth. The InsurTech space is nascent, and this acquisition demonstrates our commitment to industry leadership.”
With the acquisition, Porch seeks to create efficient growth with reduced customer acquisition cost through the homebuyers accessed through its vertical software platform, proprietary property data collection and HOA’s current licensure in 31 states. Porch plans to expand HOA’s Insurtech footprint nationwide through its own insurance offering and HOA’s existing independent agent distribution channels.
Combining Porch’s vast access to homebuyers and unique property data with HOA’s strong pricing and claims experience, Porch believes it can become one of the largest InsurTech companies with significant advantages to driving rapid, long-term growth. For the full year 2021, the Company expects over $270 million of pro forma gross written premium between HOA and Porch’s existing insurance agency.
Agents and customers currently using HOA services should expect enhanced product offering and expanded opportunities through the Porch vertical technology systems and data.
About Porch Group
Seattle-based Porch Group, the vertical software platform for the home, provides software and services to more than 11,150 home services companies such as home inspectors, movingcompanies, real estate agencies, utility companies, and warranty companies. Through these relationships and its multiple brands, Porch provides a moving concierge service to homebuyers, helping them save time and make better decisions on critical services, including insurance, moving, security, TV/internet, home repair and improvement, and more. To learn more about Porch, visit porchgroup.com or porch.com.
Forward-Looking Statements
Certain statements in this press release may be considered “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 generally relate to future events or Porch’s future financial or operating performance. For example, projections of future revenue and other metrics, business strategy and plans, and anticipated impacts from pending or completed acquisitions, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Porch and its management, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) the ability to recognize the anticipated benefits of Porch’s December 2020 business combination (the “Merger”) with PropTech Acquisition Corporation (“PropTech”), which may be affected by, among other things, competition and the ability of the combined company to grow and manage growth profitably, maintain key commercial relationships and retain its management and key employees; (2) expansion plans and opportunities, including future and pending acquisitions or additional business combinations; (3) costs related to the Merger and being a public company; (4) litigation, complaints, and/or adverse publicity; (5) the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, demographic trends and employee availability; (6) privacy and data protection laws, privacy or data breaches, or the loss of data; (7) the impact of the COVID-19 pandemic and its effect on the business and financial conditions of Porch; and (8) other risks and uncertainties described in Porch’s filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov.
Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Porch does not undertake any duty to update these forward-looking statements, except as may be required by law.
Porch Press contact:
Jordan Schmidt
Gateway Group
(949) 386-6332
PRCH@gatewayir.com
Porch Investor Relations contact:
Cody Slach, Matt Glover
Gateway Group
(949) 574-3860
PRCH@gatewayir.com