Peoria, Ill.-based RLI Corp. announcedthat it will acquire Contractors Bonding Insurance Co. (CBIC) through an acquisition of its holding company, Data and Staff Service Co. (DSS) for approximately $137 million in cash. The acquisition is subject to regulatory approval and expected to close in the first quarter of 2011.
CBIC is a privately held, Seattle-based insurance company specializing in surety bonds and related niche property and casualty insurance products. The company serves more than 30,000 contractors and over 4,000 insurance agents and brokers nationwide. CBIC operates 13 regional branch offices and is considered a leading writer of contractor license bonds in the Northwest.
“CBIC has a track record of success and provides new market and product expansion opportunities for RLI,” said Jonathan E. Michael, president and CEO of RLI Corp. “The company’s geographic footprint, underwriting philosophy, and culture align well with RLI’s business. We anticipate that the acquisition will be accretive to earnings within the first year of ownership.”
For the nine months ending Sept. 30, 2010, CBIC’s GAAP financial results included total assets of $270 million and total revenue of $45 million. At closing, the company expects shareholder’s equity to approximate $108 million. CBIC is rated “A” (Excellent) by A.M. Best Co. and has achieved an underwriting profit in 13 of the past 14 years.
RLI is a specialty insurance company serving niche or underserved markets. With a portfolio of property and casualty coverages and surety bonds, it has achieved an underwriting profit in 29 of the past 33 years, including the past 14.
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