HC2 will make an initial payment of $7 million in cash and HC2 securities for the acquisition of the businesses.

The acquisition will be paid in cash, issuance of 11.000% Senior Secured Notes due 2019 and new shares of common stock of HC2.

The deal, subject to customary closing conditions, is scheduled to be completed during the third fiscal quarter.

The acquisition price is subject to adjustment based on certain items, including operating results through the closing date.

HC2 chairman, president and CEO Philip Falcone said, "This transaction marks a significant milestone for establishing our insurance platform, while also supporting the continued growth of HC2. Given my prior role and experience investing in the insurance space, I believe this transaction specifically — and the sector more broadly — could be a big value driver for HC2."

"We are thrilled to partner with Jim Corcoran as the new Executive Chairman of our insurance unit, Continental Insurance Group Ltd., as Jim has significant experience in the insurance industry on both the corporate and regulatory side as the former Superintendent of the New York Insurance Department. Together with Jim, and the management team we’re bringing over from AFG, we see an opportunity to build an attractive portfolio of insurance businesses creating significant shareholder value."

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