Carlyle Group to Acquire TWFG, Inc.

TL;DR

Carlyle buying TWFG for an undisclosed amount, deal expected Q4 2024.

AI Summary

On July 17, 2024, TWFG, Inc. entered into a Material Definitive Agreement related to the acquisition of all outstanding shares of common stock of TWFG, Inc. by an affiliate of The Carlyle Group. The agreement outlines the terms for the acquisition, which is expected to close in the fourth quarter of 2024, subject to customary closing conditions.

Why It Matters

This acquisition by a major private equity firm like Carlyle Group could lead to significant changes in TWFG's operations and strategic direction, potentially impacting its market position and shareholder value.

Risk Assessment

Risk Level: medium — The acquisition introduces potential risks related to integration, regulatory approvals, and market reaction to the change in ownership.

Key Players & Entities

• TWFG, Inc. (company) — Company being acquired
• The Carlyle Group (company) — Acquiring entity's affiliate
• July 17, 2024 (date) — Date of the Material Definitive Agreement
• Fourth quarter of 2024 (date) — Expected closing period for the acquisition

FAQ

Key Financial Figures

• $0.01 — which registered Class A Common Stock, $0.01 par value TWFG The Nasdaq Stock Market
• $17.00 — Common Stock"), at an offering price of $17.00 per share (the "IPO Price"), pursuant t
• $0.00001 — mpany's Class B common stock, par value $0.00001 per share (the "Class B Common Stock"),
• $72.78 — consideration of $0.00001 per share (or $72.78 in the aggregate) and (iii) 33,893,810
• $338.94 — consideration of $0.00001 per share (or $338.94 in the aggregate), to certain members o

Filing Documents

• twfg-8xk7232024.htm (8-K) — 46KB
• exhibit11-8xk.htm (EX-1.1) — 321KB
• exhibit31-8xk.htm (EX-3.1) — 131KB
• exhibit32-8xk.htm (EX-3.2) — 171KB
• exhibit101-8xk.htm (EX-10.1) — 221KB
• exhibit102-8xk.htm (EX-10.2) — 243KB
• exhibit103-8xk.htm (EX-10.3) — 473KB
• exhibit104-8xk.htm (EX-10.4) — 65KB
• exhibit106-8xk.htm (EX-10.6) — 178KB
• 0001628280-24-032599.txt ( ) — 1852KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. On July 17, 2024, TWFG, Inc. (the "Company") priced the initial public offering ("IPO") of its Class A common stock, $0.01 par value per share (the "Class A Common Stock"), at an offering price of $17.00 per share (the "IPO Price"), pursuant to the Company's registration statement on Form S-1 (File No. 333-280439), as amended (the "Registration Statement"). On July 17, 2024, in connection with the pricing of the IPO, the Company and TWFG Holding Company, LLC entered into an underwriting agreement (the "Underwriting Agreement") with J.P. Morgan Securities LLC and Morgan Stanley Co. LLC, as representatives of the several underwriters listed on Schedule 1 thereto (the "Underwriters"), pursuant to which the Company agreed to offer and sell 11,000,000 shares of its Class A Common Stock at the IPO Price. The Underwriters were granted a 30-day option to purchase up to an additional 1,650,000 shares of Class A Common Stock from the Company, which was exercised by the Underwriters in whole. The offering closed and the shares were delivered on July 19, 2024 (the "Closing Date"). The Company made certain customary representations, warranties and covenants and agreed to indemnify the Underwriters against (or contribute to the payment of) certain liabilities, including liabilities under the Securities Act of 1933, as amended (the "Securities Act"). This description of the Underwriting Agreement is qualified in its entirety by reference to the full text of the Underwriting Agreement attached hereto as Exhibit 1.1, which is hereby incorporated by reference into this Item 1.01. In connection with the consummation of the IPO, the Company entered into the following agreements, previously filed as exhibits to the Registration Statement a Registration Rights Agreement, dated as of July 19, 2024, by and among the Company and the stockholders party thereto, a copy of which is filed as Exhibit 10.1 to this Current Report on Form

02. Unregistered Sales of Equity Securities

Item 3.02. Unregistered Sales of Equity Securities. In connection with the reorganization incident to the IPO, the Company issued (i) 2,161,874 shares of Class A Common Stock in exchange for units ("LLC Units") in TWFG Holdings, (ii) 7,277,651 shares of Company's Class B common stock, par value $0.00001 per share (the "Class B Common Stock"), for consideration of $0.00001 per share (or $72.78 in the aggregate) and (iii) 33,893,810 shares of the Company's Class C common stock, par value $0.00001 per share (the "Class C Common Stock"), for consideration of $0.00001 per share (or $338.94 in the aggregate), to certain members of TWFG Holdings. The shares were issued in reliance on the exemption contained in Section 4(a)(2) of the Securities Act, on the basis that the transaction did not involve a public offering.

03. Material Modifications to Rights of Security Holders

Item 3.03. Material Modifications to Rights of Security Holders. The description in Item 5.03 below of the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws is incorporated herein by reference. Item 5.02. Departure of Directors or Certain Officers Election of Directors Appointment of Certain Officers Compensatory Arrangements of Certain Officers. On July 18, 2024, Janet S. Wong and Robin A. Ferracone were appointed to the Company's board of directors. Information regarding the committees upon which these directors serve, related party transactions involving any of these directors and the compensation plans in which such directors participate were previously reported (as defined by Rule 12b-2 under the Securities Exchange Act of 1934, as amended) in the Registration Statement. On July 17 and 18, 2024, the Company entered into indemnification agreements with its directors and executive officers in connection with the IPO. These agreements will require the Company to indemnify these parties to the fullest extent permitted under Delaware law, including indemnification of expenses such as attorneys' fees incurred by the director or executive officer in any action or proceeding, including any action or proceeding by or in right of us, arising out of the person's services as a director or executive officer. The foregoing is only a summary of the material terms of the indemnification agreements, and is qualified in its entirety by reference to the form of indemnification agreement, which is filed as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference. On July 17, 2024, the Company adopted the TWFG, Inc. 2024 Omnibus Incentive Plan (the "Plan"), a copy of which is filed as Exhibit 10.6 to this Current Report on Form 8-K and is incorporated by reference herein. The description and form of the Plan is substantially the same as the description and the form set forth in and filed as an exhibit to the Regi

03. Amendments to Articles of Incorporation or Bylaws Change in Fiscal Year

Item 5.03. Amendments to Articles of Incorporation or Bylaws Change in Fiscal Year. On July 17, 2024, the Company amended and restated its Certificate of Incorporation, filed with the Secretary of State of the State of Delaware (the "Amended and Restated Certificate of Incorporation"). On July 17, 2024, the Company amended and restated its By-laws (the "Amended and Restated Bylaws"). Copies of the Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws are filed as Exhibits 3.1 and 3.2 to this Current Report on Form 8-K, respectively, and are incorporated herein by reference. The descriptions and forms of the Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws are substantially the same as the descriptions and forms set forth in and filed as exhibits to the Registration Statement.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description of Exhibit 1.1 Underwriting Agreement, dated as of July 17, 2024, among TWFG, Inc., TWFG Holding Company, LLC and J.P. Morgan Securities LLC and Morgan Stanley Co. LLC, as representatives for the underwriters named therein. 3.1 Amended and Restated Certificate of Incorporation of TWFG, Inc., dated July 17, 2024. 3.2 Amended and Restated Bylaws of TWFG, Inc., dated July 17, 2024. 10.1 Registration Rights Agreement, dated as of July 19, 2024, by and among TWFG, Inc. and the stockholders party thereto . 10.2 Tax Receivable Agreement, dated as of July 19, 2024, by and among TWFG, Inc. , TWFG Holding Company , LLC and each member of TWFG Holding Company, LLC party thereto . 10.3 Third Amended and Restated Limited Liability Agreement of TWFG Holding Company, LLC , dated as of July 17, 2024, among TWFG Holding Company, LLC , TWFG, In c. and the other signatories party thereto . 10.4 Reorganization Agreement, dated as of July 17, 2024, by and among TWFG, Inc. , TWFG Holding Company, LLC and the other signatories party thereto . 10.5 Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10. 7 to TWFG, Inc.'s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 24, 202 4 ). 10.6 TWFG, Inc. 2024 Omnibus Incentive Plan.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TWFG, INC. Date July 23, 2024 By s Richard F. Bunch III Name Richard F. Bunch III Title Chief Executive Officer

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