Strategy International to Acquire RS Group of Companies

Toronto-based Strategy International Insurance Group Inc., which provides specialty lines of insurance, reinsurance and structured risk underwriting focusing on credit risk and credit enhancement, has signed a letter of intent to acquire the outstanding shares of RS Group of Companies Inc.

“Management believes that the long-term objectives of Strategy International and RS Group will converge and that combining their strengths in a single organization will lead to operational efficiencies and open up new revenue opportunities for the surviving entity,” said a company announcement.

RS specializes in “pass-through risk specialty insurance and reinsurance platforms throughout North America.” It is structured as a holding company for an integrated group of businesses that operates in four distinct operating segments: residential rental services, timeshare affinity program, financial guarantee, and specialty insurance brokerage. Current offerings include RentShield, a residential rental services program being offered to North America’s $300 billion residential real estate rental market, and Value Guaranteed Vacations, Inc.’s timeshare affinity program, VGV Club.

Strategy International plans to acquire all of the outstanding shares of common stock, outstanding options and all other outstanding equity securities of RS Group. The bulletin noted that the “transaction is subject to the negotiation and execution of a definitive merger agreement and other definitive documents on terms and conditions acceptable to Strategy International and RS Group, as well as making all appropriate filings with the Securities and Exchange Commission and other regulatory agencies, as may be required.”

Strategy International said it would offer around U.S.$1.75 per share of common stock of RS Group. “The price per share of RS Group’s common stock is subject to adjustment based on the completion of a valuation of the company and receipt of a fairness opinion, which could result in a material change in the merger consideration,” it went on to explain. The parties have agreed to a 60-day exclusivity period.

“This acquisition will provide Strategy with the resources to enhance further the company’s global expansion. RS Group’s proven product expertise will be an exceptional addition to the Strategy underwriting group,” stated president and CEO Stephen Stonhill.

RS Group CEO noted: “This amalgamation of two operations, which have complementary abilities and similar long-term objectives, indicates the ability of these two companies to recognize yet another opportunity to expand their presence within the insurance and reinsurance industry. We are excited to enter into this affiliation and are confident that our combined strength will enhance the ability of RS Group to fulfill its operational goals.”