Horace Mann Educators to Buy Medical Mutual Units in $240M Employer Benefits Push

Horace Mann Educators agreed to buy three Medical Mutual of Ohio businesses for a net purchase price of about $240 million , in a move aimed at expanding its employer benefits platform and distribution reach. The company expects the deal to add about $20 million to $25 million in net core earnings and roughly 100 basis points of ROE in the first 12 months after closing, and says it should be immediately accretive to core EPS. The acquisitions bring in more than 1 million covered lives , over 7,000 employer relationships and more than 1,000 agents and brokers , while Horace Mann plans to keep leverage below 30% and continue its dividend and share repurchase strategy.

Horace Mann Educators NYSE: HMN said it has agreed to acquire three businesses from Medical Mutual of Ohio in a set of transactions intended to expand its employer solutions platform, broaden distribution and add customer relationships. On a special investor call, President and Chief Executive Officer Marita Zuraitis said the company will acquire Employee Services, Reserve National and the Group Life & Disability business of MedMutual Life. She said the businesses are complementary to Horace Mann’s existing focus on educators and employer-based benefits.

Chief Financial Officer Ryan Greenier said Horace Mann will acquire the three businesses in two separate transactions for a net purchase price of about $240 million. He said the valuation is approximately 10 times estimated full-year 2026 net income for the acquired businesses. The company expects the transactions to contribute about $20 million to $25 million of net core earnings and approximately 100 basis points of return on equity during the first 12 months after closing. Greenier said the deal is expected to be immediately accretive to core earnings per share and shareholder return on equity. Horace Mann expects to finance the acquisition with approximately $100 million to $150 million of revolving credit borrowings, with the balance funded from excess capital. Greenier said debt to total capitalization excluding accumulated other comprehensive income is expected to remain below 30% at closing.

In response to an analyst question, Greenier said the company’s $20 million to $25 million earnings estimate includes financing costs and lost net investment income. He said the company’s revolving credit facility carries a rate of SOFR plus 115 basis points, or about 4.88% to 4.90% at the time of the call.

Zuraitis said the transactions will add more than 1 million covered lives, more than 7,000 employer relationships and more than 1,000 producing agents and brokers. She said the deal supports Horace Mann’s long-term objectives of deepening relationships with educator households, reaching educators where the company has less presence and expanding thoughtfully into adjacent customer segments. The Employee Services business adds an employee assistance platform focused on mental health, wellness and workplace support. Zuraitis said educators have consistently identified mental health support as a major need, and school administrators have identified employee wellbeing as important for recruiting and retention. Reserve National expands Horace Mann’s individual supplemental business. Zuraitis said combining Reserve National with ...