A major insurance holding company announced Friday that it plans to acquire a Texas property/casualty insurance carrier.
AmTrust Financial Services, a New York City multinational, has entered into an agreement to purchase Republic Companies and Republic Insurance Holdings for $233 million. Under terms of the deal,
AmTrust will pay $113 million in upfront cash, a $105 million note issued by
AmTrust with an annual 5.75% interest and a four-year maturity, and additional cash payments to be made over five years.
Republic has been providing property/casualty insurance and niche policies to individuals and small businesses for more than 100 years, distributing products through a network of independent agents. It operates primarily in in Texas, Louisiana, Oklahoma, Arkansas Mississippi and New Mexico.
Barry Zyskind, president and CEO of AmTrust Financial Services, celebrated the deal as one that will expand the company’s footprint in the Southwestern US.
“Republic is an excellent addition to our company’s property/casualty and service and fees businesses,” Zyskind said in a statement. “The combination of Republic’s well-established business and brand with AmTrust’s efficient operating platform and strong balance sheet offers great opportunities for profitable growth especially in Republic’s key Southwestern markets.
“We look forward to Republic’s seasoned team of managers and employees contributing to the success of our company and to the benefit of our shareholders, agents and customers.”
Pending regulatory approval, AmTrust expects the deal to be completed during the first half of 2016.
