Abacus Life to acquire FCF Advisors, boosts AUM by $600 million

ORLANDO – Abacus Life, Inc. (NASDAQ:ABL), an alternative asset manager known for its longevity and actuarial technology, announced today its definitive agreement to acquire New York-based FCF Advisors, an asset manager and index provider. This acquisition is set to increase Abacus’s assets under management (AUM) by approximately $600 million.

FCF Advisors specializes in free cash flow-focused investment strategies and has developed a suite of over 50 customizable free cash flow index strategies. These strategies span eight global equities allocation categories and are available in separately managed accounts and white label SMA model delivery.

Jay Jackson, CEO of Abacus Life, expressed enthusiasm about the acquisition, stating that it significantly expands ABL Wealth’s offerings, aligning with the company’s goal of delivering comprehensive financial advisory services throughout a client’s lifespan.

The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions. Legal counsel for Abacus Life is provided by Burr & Forman, while Dynasty Investment Bank acts as the exclusive financial advisor to FCF Advisors. FCF Advisors’ legal counsel includes DLA Piper, Stradley Ronon Stevens & Young, and Rivkin Radler.

Abacus Life, with over $2 billion in AUM, is the only publicly traded licensed life policy origination company and asset manager. It has expanded into new verticals, including ABL Wealth and ABL Tech, which offer wealth management services and advanced data analysis for various institutional clients.

In other recent news, Abacus Life, Inc. has signed a definitive agreement to acquire Carlisle Management Company SCA, a Luxembourg-based leader in the life settlement investment sector, for approximately $200 million. This acquisition is set to expand Abacus Life’s global reach and asset management portfolio with an additional $2 billion in assets under management. Both companies view this merger as a strategic fit, aiming to provide diversified offerings to institutional investors and expand their presence in the life settlement market.

In relation to financial developments, B.Riley Securities has adjusted its price target for Abacus Life to $15.00 from the previous $16.00, while still maintaining a Buy rating on the stock. This adjustment follows a recent common stock offering by Abacus Life, issuing 10 million shares, with an additional over-allotment option of 1.5 million shares. B.Riley’s analysis suggests that the raised capital, coupled with assumed debt, could potentially enable Abacus Life to acquire an additional $138 million in policies, generating $27.6 million in gross revenue based on a 20% margin.

Furthermore, B.Riley projects substantial growth for Abacus Life’s subsidiaries, ABL Wealth and ABL Tech, forecasting a combined revenue of $25 million by 2026. Lastly, Abacus Life has appointed Elena Plesco as its new Chief Capital Officer, who will oversee the company’s capital management strategies and global expansion efforts. These are the recent developments for Abacus Life, Inc.

InvestingPro Insights

As Abacus Life, Inc. (NASDAQ:ABL) positions itself for growth through the strategic acquisition of FCF Advisors, the company’s financial health and market performance provide critical context for investors. Abacus Life is expected to see net income growth this year, a positive sign for potential investors looking for profitability in the companies they invest in. This aligns with the company’s expansionary moves and could signal a strengthening of its financial position.

Despite the optimism surrounding growth, Abacus Life’s stock has experienced significant price volatility, with a notable drop of 22.54% over the last three months and 25.46% over the last six months. This could be an indicator of market sensitivity or investor hesitation, which may be worth considering when evaluating the stock’s future movements. However, the company’s liquid assets surpass its short-term obligations, suggesting a solid liquidity position that could help weather periods of market instability.

From a valuation standpoint, Abacus Life is trading at a high earnings multiple, with a P/E ratio of 9300 and an adjusted P/E ratio for the last twelve months as of Q1 2024 at 723.64. This could suggest that the stock is priced optimistically relative to earnings, which may be a point of analysis for value-focused investors.

InvestingPro offers additional insights into Abacus Life, with more tips available to guide investment decisions. For further details, investors can explore the full suite of InvestingPro Tips at https://www.investing.com/pro/ABL.

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