Aon, Footman James
Chicago-based Aon Corp. completed the acquisition of Footman James from Alchemy Partners Ltd. based in Guernsey. Terms of the transaction were not disclosed.
The transaction will have no effect on existing policies, and client service will continue uninterrupted, Aon said. Footman James will continue to trade under its own name.
Ebix Inc. made a proposal to acquire the outstanding common stock of Docucorp International Inc. for $11 per share in cash and Ebix stock, or a total equity value of approximately $140 million. The offer represents a 10.2 percent premium on the proposed merger offer price given by Skywire Software and a 33 percent premium to the six months average closing price for Docucorp’s common stock.
Ebix believes that combining Ebix and Docucorp would create combined earnings per share of $2 or more and pro forma revenue of approximately $130 million. Ebix believes the combined company can generate annual income after taxes of at least $16 million or more.
Ebix proposed to pay for the transaction with $45 million in cash and $95 million in the form of 3.4 million shares of newly registered Ebix stock, valued at $ 27.40 per share.
AIG, 21st Century
American International Group Inc. submitted a letter to the board of directors of 21st Century Insurance Group proposing to acquire the outstanding 38.1 percent of publicly held shares of 21st Century for $19.75 per share in cash.
AIG and its subsidiaries own approximately 61.9 percent of the shares of 21st Century. The aggregate cash consideration payable would be approximately $690 million. Following the transaction, 21st Century would become a subsidiary of AIG.
AIG said it has no interest in a disposition of its controlling equity stake in 21st Century.
Canada’s Kingsway Financial Services Inc. agreed to acquire Mendota Insurance Co., a subsidiary of The St. Paul Travelers Companies Inc. The transaction includes Mendota’s wholly owned subsidiaries, Mendakota Insurance Co. and Mendota Insurance Agency Inc. The transaction is scheduled to be completed following regulatory approvals. Terms of the transaction were not disclosed.
USI Holdings Corp. headquartered in Briarcliff Manor, N.Y., agreed to be acquired by GS Capital Partners, a private equity affiliate of Goldman, Sachs & Co., in a transaction valued at approximately $1.4 billion, including repayment of USI’s existing debt obligations.
Under the terms of the GS Capital merger agreement, USI stockholders will receive $17 in cash for each share of USI common stock, representing a premium of 20.5 percent to the average closing share price for the 30 calendar days prior to Oct. 24, 2006.
GS Capital Partners Funds are part of the Goldman Sachs’ Principal Investment Area in the Merchant Banking Division.
Kingsway, Robert Plan Renewal Rights
Toronto-based Kingsway Financial Services has agreed to acquire the renewal rights of The Robert Plan Corp.’s assigned risk business.
As part of the arrangements, RPC was given the authority to market the assigned risk programs on behalf of Kingsway, and Kingsway has assumed certain operating functions related to the business. RPC also has been granted an option for a limited period of time to repurchase these rights and acquire these operating functions from Kingsway. Kingsway is a large truck and non-standard automobile insurer in the United States and Canada.
Stockton, Calif.-based Western Maritime Insurance Services, a specialist in commercial and recreational marine wholesale insurance, is expanding into 13 states for 2007 through the newly formed entity, Maritime General. The expansion states include Arkansas, Missouri, Tennessee, Texas, Oklahoma, Minnesota, Wisconsin, Michigan, Ohio, Indiana, Illinois, Iowa and Kentucky.
Seattle-based Safeco has reported fourth-quarter net income of $216.4 million, or $1.96 per diluted share. The net income for the same period the previous fiscal year was $190.7 million. The overall property/casualty combined ratio was 87.2 for the fourth quarter, versus a ratio of 89.1 for the same quarter in the previous year.
“We finished the year with another quarter of excellent underwriting results across all of the core business lines,” said Paula Rosput Reynolds, president and CEO. “Obviously we are pleased with how the year played out. In the fourth quarter, we grew policies in force in property and commercial lines and achieved new business policy growth in preferred auto.”
For the full year ended 2006, the company reported net income of $880 million, compared with $691.1 million the previous year. Operating earnings were $207.3 million in the fourth quarter, compared with $184.3 million in the same quarter in 2005. The combined ratio for the year was 87.3, compared with 91.1 one year ago.
Pretax catastrophe losses for the fourth quarter were 36.1 million, primarily due to estimated losses from the Pacific Northwest windstorm in Dec. 2006. Pretax catastrophe losses were $51.4 million in the prior-year period, stemming largely from Hurricane Wilma. After reinsurance, pretax catastrophe losses were $155.3 million for the year, compared with $267.4 million in 2005, primarily from Hurricanes Katrina and Rita.
Safeco recorded $3 million in restructuring and asset impairment charges associated with actions taken in the fourth quarter. For the full year, those charges totaled $25.7 million. For 2007, the company is targeting an additional $50 million to $75 million reduction in its annualized expense run rate by year-end. The projected savings are consistent with Safeco’s strategy to achieve greater competitiveness, the company said.
“We met our expense savings actions,” said Ross Carey, chief financial officer. “Our operating earnings included an after-tax restructuring charge of $2 million, or $0.02 per share.”