American insurance firm Reliance Global has signed a definitive agreement to acquire Medigap Health Insurance Company (Medigap).

Domiciled in Florida, Medigap is an insurance broker specializing in offering Medicare supplement insurance cover.

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Reliance will pay approximately $19.6m for the deal, which includes both cash and restricted common stock of Reliance.

The acquisition is aimed at expanding Reliance’s capabilities within the Medicare supplement market while complementing its existing portfolio companies.

Reliance noted that in the 12 months that ended on 30 September 2021, Medigap recorded revenue of nearly $7m.

Medigap is expected to bolster Reliance’s revenue by 70% and has the potential to be highly accretive, the insurer added.

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Reliance Global Group CEO Ezra Beyman said: “We are excited to announce the upcoming acquisition of Medigap, one of the nation’s fastest-growing providers of Medicare supplemental insurance coverage.

“We anticipate significant operating synergies across the organization, which we believe will contribute to enhanced profitability.”

Upon completion, Kyle Perrin will remain COO of Medigap who brings extensive experience in the Medicare supplement market.

The deal, which awaits regulatory approval, is expected to close in the first quarter of 2022.

In February 2020, Reliance invested in digital insurance agency Nsure and acquired a 35% stake in the insurer.

In other US insurance news, last week, Kin Insurance bought an inactive insurance carrier with a license to operate in 43 states.