HealthWest to Acquire Directors Diversified

The HealthWest Foundation, a Chatsworth-based, nonprofit health care organization, signed a letter of intent to acquire Directors Diversified Industries, a small Pasadena life insurance firm, the two organizations reported Monday. Terms weren’t disclosed.

Directors Diversified writes life insurance in six states and had assets of $19.6 million on Dec. 31. The company is closely held, with about 210 shareholders, and it earned $103,000 on revenue of $5.4 million last year, said company president Donald R. Clark.

He said the company, which has 21,682 customers, had a net worth of $5.6 million on Dec. 31.

Jerry Torgerson, a HealthWest vice president, said Directors Diversified would be transformed into a health insurance company as part of HealthWest’s for-profit CareAmerica subsidiary. He added that approval for the deal is expected from the state Department of Insurance by the end of October, after which the acquisition can be completed.

Founded in the mid-1960s by a group of automobile dealers, Directors Diversified has been for sale for several years, Clark said. Its main operating unit is Directors Life, and although the company also sells coverage to supplement Medicare, Clark said life insurance makes up 90% of the business.