Terry Pegula is extending his push into financial services.
His company East Resources Acquisition Co. has reached a merger agreement with asset manager and life insurer Abacus Settlements and Longevity Market Assets.
The acquisition is part of the Buffalo Bills and Sabres owners’ push to broaden their family’s investments and diversify their assets.
Pegula made the purchase through an entity that he formed two years ago called East Resources Acquisition Co. that raised more than $300 million from investors, initially with the intent of making acquisitions in the then-depressed oil and natural gas industry.
But East Resources never made any energy deals, and in recent months, it shifted its focus toward financial services as the deadline approached when it would either have to complete a deal or return its money to investors. East earlier this year extended its deadline to complete an acquisition.
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East Resources evaluated over 40 business combination opportunities, researching more than 15 targets and making eight offers, before deciding on this deal, according to Adam Gusky, the company’s chief investment officer.
“Terry Pegula stayed true to his disciplined and value-oriented nature, refusing to overpay simply to sign up a deal,” Gusky said during a conference call with investors. “Even after this exhaustive search process, the opportunity to partner with Abacus was so compelling that we elected to deposit additional funds into the trust.”
The transaction is expected to close as early as the fourth quarter of 2022, subject to regulatory approvals and approval from East Resources’ stockholders.
Pegula, who’s made much of his multibillion-dollar fortune in oil and natural gas exploration and production, sold many of his assets in that space and turned his attention to entering other business ventures.
Under the terms of the deal, the company, now to be known as Abacus Life, will become publicly listed on Nasdaq as “ABAL” via a special purpose acquisition company (SPAC), which is formed strictly to raise capital through an initial public offering or to acquire or merge with an existing company.
Under the deal, Abacas Life will be publicly traded on the Nasdaq. It will receive up to $98 million of cash to lower its cost of capital, scale its current portfolio and begin securing additional policies.
“Abacus’ leadership has built a leading business in the life settlement industry with a deep management team, each with decades of experience,” Pegula, chairman, East Resources’ CEO and president, said in a statement. “We are very fortunate to have found such a great partner for the SPAC and more importantly for shareholders, a company that is a highly scalable, sector market leader, underpinned by steady financial performance and strong growth potential.”
Pegula, 71, founded East Resources, a special purpose acquisition company, in 1983.
East Resources also is backing Atlanta-based Bison Wealth, a form managing money for some of the world’s other richest business entities. Pegula also owns a Nashville recording studio and record label.
Pegula acquired the Sabres for $189 million in 2011 and the Bills for $1.4 billion in 2014. Bison Wealth was created through he and his wife Kim’s family office, known as East Asset Management, in conjunction with Teton Capital Partners, its operating partner, founded by Brad Ball.
In addition, East Asset Management, along with Callodine, founded by Jim Morrow in 2018, have been active in the asset management and alternative private credit spaces. In the last few years alone, East Asset Management and Callodine have completed six transactions, including the purchase of a majority ownership stake in Buffalo-based venture capital firm Rand Capital; a $400 million asset-based lending business; a $1.3 billion private real estate credit platform and taking private Manning & Napier, a $20 billion-plus asset manager.
Pegula has a net worth of $7.7 billion, according to the Bloomberg Billionaires Index, ranking him 271st on the list of the world’s richest people. And the Bills are now reportedly worth nearly $3 billion, Sportico notes, more than double what he paid for the franchise. He’s also now working toward building a $1.4 billion stadium for the Bills in Orchard Park.
As for Abacus, it has purchased life insurance policies in the U.S. for nearly the past two decades, with a nearly 20% market share, and approximately four times the origination growth over the last six years, with almost $1.3 billion in face value of policies purchased from 2019 to 2021. The combined company will have an estimated post-transaction enterprise value of $618 million.
Abacus Life has 59 employees, with about $950 million in policies. Following the closing of the transaction, the existing management team of Abacus, led by CEO Jay Jackson, will remain in place.
“This transaction is an important milestone and will assist in accelerating the scale of our platform to increase penetration into the growing $233 billion potential annual life settlement market,” Jackson said.
Store 716 asks for fans to sign ‘BILLIEVE’ wall
A year after opening its first brick-and-mortar shop, Store 716 has become a destination for Buffalo Bills fans.
From the start of Bills training camp, fans have been encouraged to come by the Olmstead Avenue store in Depew to write on the “BILLIEVE” wall outside of the entrance. Hundreds of Bills fans have signed the wall, from as far as Florida, Texas and Nebraska.
Store 716 operated solely online, before opening its first retail location last September. The store designs and sells a wide variety of Buffalo-themed apparel and products.
Want to know more? Two stories to catch you up:
Welcome to Buffalo Next. This newsletter from The Buffalo News will bring you the latest coverage on the changing Buffalo Niagara economy – from real estate to health care to startups. Read more at BuffaloNext.com.
Recent news tied to Buffalo Niagara’s economy
Farmers in New York State face having to pay their workers overtime after they put in 40 hours of work a week under a plan recommended Tuesday that would be phased in over a decade.
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Buffalo Niagara is getting $25 million for a technology hub as part of the federal Build Back Better program.
A Buffalo tool maker is eliminating 18 jobs after a merger means its operations are shifting to Wisconsin.
Valu Home Centers is closing three of its Western New York stores as it refocuses on more lucrative markets and building its online sales.
Workers at four Western New York nursing homes have approved a new contract, but unionized employees at other facilities are gearing up for five-day strikes as their contract talks continue.
Five reads from Buffalo Next:
1. Pickup in WNY housing inventory means more opportunity and time for buyers. Homebuyers in Western New York are starting to breathe easier and take more time before making their decisions, now that there are more homes for sale on the market and less need for them to act quickly. But they still can’t dawdle. And it doesn’t mean they’re getting a deal on houses, which are now priced much higher than they would have been a year or two ago.
2. Silo City project caught up in acrimonious dispute. A legal battle has erupted within the Silo City project team, after the construction manager on the $41 million redevelopment job was replaced amid allegations of shoddy work and poor performance that the developer says are now requiring costly repairs and a year’s delay.
3. Developers from Buffalo and Rochester team up for affordable housing project near Broadway Market. A Rochester supportive housing developer is teaming up with Buffalo’s Cedarland Development Group on a $20.5 million project that will bring a mix of housing options to 38 city-owned vacant lots on Playter Street, on Buffalo’s East Side.
4. Settlement leads to scrapping of Gates Circle apartment project. Seeking to head off further development next door, the nonprofit owner of Canterbury Woods is buying a strip of land next to its Gates Circle facility to ensure that it will be set aside as green space instead of a six-story building that had been approved for the site.
5. Green Organization spends $13 million on two Amherst apartment complexes. A growing suburban apartment developer acquired two properties in Amherst from Clover Management for $13.35 million and plans to spend another $4 million to upgrade the communities, even as it prepares to undertake a $45 million project nearby.
The Buffalo Next team gives you the big picture on the region’s economic revitalization. Email tips to firstname.lastname@example.org or reach Deputy Business Editor David Robinson at 716-849-4435.
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