Reliance Global Group, Inc. (NASDAQ: RELI) shares were on a significant upward trajectory, climbing 34.56% to reach $2.92 at the last check today. This spike follows the company’s announcement of the planned divestiture.
Divestiture for Operational Advancements
In a press release yesterday, it was announced that Fortman Insurance Agency, a completely owned subsidiary of Reliance Global, will be sold. A non-binding Letter of Intent (LOI) was signed by the corporation to sell Fortman for $5 million in cash, which is significantly more than the acquisition cost.
Reliance Global has made investments to improve the operations of the company after purchasing Fortman. Fortman is now a well-capitalized, effectively run agency with a wider market reach thanks to these reforms, which also include system upgrades, leadership reorganizations, and strategic improvements.
The company’s ability to maximize shareholder value through asset optimization and monetization is validated by the sale price, which represents a premium above the purchase cost.
Strategic Attention to Capital Efficiency and Portfolio Optimization
Reliance Global’s methodical approach to capital management is demonstrated by the proposed sale of Fortman. Given the company’s present market valuation, the deal is expected to significantly increase cash inflows, strengthening the balance sheet.
In addition to highlighting the latent value in the company’s portfolio, this strategic liquidity event also demonstrates the company’s intention to reallocate funds to more cooperative endeavors.
Proceeds to Fund Spetner Associates Acquisition
In line with its OneFirm integration strategy, Reliance Global plans to use the money from the sale of Fortman to acquire Spetner Associates, a quickly expanding insurance platform.
Spetner is a useful addition to the parent company’s growing reach because of its steady revenue growth and robust cash flow creation. The proposed purchase represents a revolutionary move toward long-term profitability, operational synergies, and scalable expansion.
Reliance Global is strengthening its internal capital structure and reaffirming its larger commitment to accretive growth and sustainable shareholder value generation by substituting Spetner for Fortman.
