Allied World Assurance Company Holdings, AG has announced “significant new merger-related synergies that can be achieved through the combination with Transatlantic Holdings, Inc.”
The company said it “now estimates an annual run rate of over $160 million in synergies, an $80 million increase over the $80 million of synergies originally announced. The new estimate excludes revenue synergies and any potential upside from the utilization of excess capital. Operating cost synergy estimates are unchanged.”
Allied World added that the increased level of synergies “represents an estimated capitalized value of $12.04 per pro forma share of TransAllied [the proposed name of the company, if their merger goes through], an increase of $6.02 per pro forma share from what was originally contemplated when the merger agreement was announced. It also represents an estimated capitalized value of approximately $10.58 per share to Transatlantic’s shareholders, an increase of $5.29 per share from the original projection. These estimates were calculated based on a 7.0x price to earnings multiple.”
Scott Carmilani, Allied’s Chairman, President and CEO added: “Having spent significant time with the TransAllied team since our announcement, both companies believe that these incremental merger synergies are achievable in a combination of Allied World and Transatlantic. We identified these new synergies through the careful and thorough merger integration planning between Allied World and Transatlantic over the past few months. Our revised estimate, double our initial projection, remains conservative and continues to exclude any revenue synergies and incremental capital upside that we think can ultimately be achieved in the merger.
‘We remain steadfast in our commitment to the current terms of our merger agreement with Transatlantic. Shareholders of Transatlantic and Allied World should vote on the merits of the current terms of our merger agreement. As we continue to believe that our deal provides the best long-term value for all shareholders we have no plans to adjust the terms of the merger agreement. We look forward to closing our transaction as early as possible in the fourth quarter and realizing the unique, significant incremental synergies and growth that our two highly complementary businesses can achieve together after the closing.’
Allied World also noted that it has “filed an updated investor presentation with the U.S. Securities and Exchange Commission regarding the Company’s previously announced merger agreement with Transatlantic, which showcases the details of the new synergies. The presentation is available under the Investor Relations portion of www.awac.com.
Source: Allied World
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