Insiders say the deal could hit the $600 million mark.
SCM Insurance Services, the largest independent, privately-owned claims and risk management solutions provider in Canada, is up for bidding, according to a new report from The Wall Street Journal.
The newspaper reports that the company’s owners, Toronto-based Torquest Partners, are working with Morgan Stanley to secure the deal, which could reach as much as $600 million. This figure is estimated based on the firm’s $60 million yearly earnings.
The deal comes at a time of several recent changes for SCM, including its acquisition of the property and casualty divisions of Granite Global Solutions in 2014. In addition, in January, SCM instituted a new CEO to take the place of founder Larry Shumka, who assumed the role of executive chairman.
Moreover, The Wall Street Journal notes that the sale would follow Torquest precedent. In 2003, the private equity firm joined an investor group to purchase Gerling Canada Insurance Co., which it renamed GCAN Insurance Company and sold to the Ontario Teachers’ Pension Plan for an undisclosed figure.
The deal lends support to Deloitte’s prediction that 2015 would be a year rife with M&A and consolidation activity, particularly in the property and casualty arena. Last year, TPG Capital bought Canadian-owned Warranty group for approximately $1.5 billion.
