AmWINS, American Equity Underwriters
AmWINS Group Inc., a Charlotte, N.C.-based national wholesale insurance broker, has acquired The American Equity Underwriters Inc., a provider of insurance programs for maritime employers with a special expertise in United States Longshore and Harbor Workers Compensation (USL&H) insurance.
In connection with the acquisition, AmWINS entered into a new $432.5 million credit facility arranged by Wachovia Securities and Madison Capital. Proceeds of the new facility were used to complete the AEU acquisition, refinance AmWINS’ existing credit facilities and to fund a $100 million dividend to AmWINS existing shareholders, comprised primarily of AmWINS employees and Parthenon Capital, a private equity firm. AmWINS said the new credit facility will provide it with additional capacity to fund new acquisitions.
D.E. Shaw, James River Group
Global investment manager D.E. Shaw group has organized a Bermuda-based holding company to acquire James River Group Inc. a North Carolina-based excess and surplus and workers’ compensation insurer, in a transaction with a total equity value of $575 million.
Under the terms of the merger agreement, stockholders of James River will be entitled to receive $34.50 in cash per share. The transaction is expected to be completed in the second half of 2007.
Under the agreement, James River and the board committee’s financial advisor will solicit superior proposals from third parties during the next 55 calendar days until Aug. 5, 2007. In the event that a superior proposal is received and the merger agreement is terminated during this 55-calendar day period, affiliates of the D.E. Shaw group will receive a termination fee of approximately $7.2 million (approximately 1.25 percent of the equity value of the transaction), according to officials.
In addition, subject to the provisions of the merger agreement, James River may, at any time prior to receipt of stockholder approval, respond to unsolicited proposals.
J. Adam Abram, president and chief executive officer of James River, said he anticipates that a new Bermuda-based reinsurance company will be added to James River after the transaction is completed. “The inclusion of this entity, and the additional capital associated with it, will add to our group’s capabilities as well as our financial strength,” Abram said.
Dick Wright, chairman of the board of James River, noted that the offer is 90 percent above the price at which the firm’s common stock was first offered publicly less than two years ago.
James River Group Inc. owns specialty property/casualty insurance companies that underwrites excess and surplus lines in 48 states and D.C. and workers’ compensation, primarily for the residential construction industry in North Carolina and Virginia.
The acquisition of all common shares of Chicago-based insurance broker Hub International Limited by funds advised by Apax Partners together with Morgan Stanley Principal Investments has been completed for $41.50 per share.
As a result of the acquisition, Hub’s common shares will cease trading on the New York Stock Exchange and the Toronto Stock Exchange and will be delisted from both exchanges.
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