First Mercury Financial to Acquire Valiant Insurance Group

First Mercury Financial Corp., based in Southfield, Mich., reported that its principal insurance subsidiary, First Mercury Insurance Co., is acquiring Valiant Insurance Group Inc., a subsidiary of Ariel Holdings Ltd.

The purchase price for Valiant, an amount equal to Valiant’s tangible book value, is anticipated to be approximately $55 million at closing. First Mercury will use cash from its insurance subsidiaries to complete the transaction.

Ariel has agreed to provide First Mercury with full protection related to the runoff of Valiant’s net loss and loss adjustment expense reserves and unearned premium reserves reflected on the closing date balance sheet. The transaction is subject to customary closing conditions and regulatory approvals and is anticipated to close in the fourth quarter of 2010.

Valiant’s existing classes of business to be retained by First Mercury include primary and excess casualty, professional and management liability, and marine.

First Mercury intends to retain Valiant’s experienced underwriting teams that produce these classes of business. Valiant President and CEO Gary Dubois, and Scott Bayer, senior vice president of Valiant, also are joining First Mercury.

Classes of Valiant business that are not consistent with First Mercury’s specialty niche underwriting focus will be discontinued.

Through May 31, 2010, gross written premiums for Valiant were approximately $34 million.

In the twelve months following the closing of the transaction, First Mercury anticipates that Valiant will write approximately $50 to $60 million of gross written premiums. First Mercury intends to retain approximately 33 percent of Valiant’s anticipated gross written premiums.

Source: First Mercury Financial Corp.

Topics Mergers & Acquisitions