Citi to spin off Primerica

'Amway' of financial services to go public in deal valued at around $236M

Citigroup Inc. is set to spin off its Primerica Inc. unit in an IPO that is slated to begin trading tomorrow.
Primerica markets insurance and investments to households with $30,000 to $100,000 in household income.
The unit has been described by some observers as the “Amway” of financial services for its strategy of recruiting clients also to sell part-time for the company.
The firm has about 100,000 salespeople who work as independent contractors.
Primerica people see the spinoff as a positive, said Steve Barger, an industry consultant, who used to run Primerica’s field operation.
“They’re excited about it,” he said.
Primerica management felt “a little constrained” under Citigroup, and more independence should give the company “freer rein to enter new businesses,” Mr. Barger added.
According to press reports, Citigroup will raise about $236 million in the sale and own anywhere from 32% to 46% of Primerica after the initial public offering. Warburg Pincus LLC, a private-equity firm, will buy between 23% to 33% of the stock.