With $85 million in newly-raised capital, CUNA Mutual Group has its sights set on more acquisitions adding to the 401(k) provider and crop insurer companies it bought in 2009.
On July 9, CUNA Mutual announced that institutional investors had purchased $85 million in fixed-rate, 20- year surplus notes to support its credit union market and diversification strategies including acquisitions and/or investment in business-to-consumer initiatives in the CU marketplace.
Since the agreement was a private placement, CUNA Mutual did not name the six investors, which are predominantly from the insurance industry with at least one pension fund represented, according to Jim Buchheim, vice president, corporate communications/public relations at CUNA Mutual.
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In 2009, the company established a business development unit that focused on acquisition opportunities and that same year, bought CPI Qualified Plan Consultants, a 401(k) provider, and ProAg, a crop insurer, which CUNA Mutual first partnered with in 2007. There are also plans to help CUs expand relationships with members through e-marketing capabilities building on several existing programs.
Buchheim said the new capital already increases the company's strong financial position.
"Many have learned through this recession that the best time to add capital is when you don't need it. We are fortunate to have growth opportunities both in working with credit unions to better serve members and in diversifying beyond the credit union space," Buchheim said. "The additional $85 million gives us more capability to invest in our future."
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