Global risk management products and services provider, Assurant Inc., announced an agreement to acquire Green Tree Insurance Agency Inc., which has offices in Minnesota and South Dakota.
Assurant is buying Green Tree from a wholly-owned subsidiary of Walter Investment Management Corp. (Walter) for $125 million in cash with a potential earnout of up to $25 million, based on future performance, the company’s announcement said.
Green Tree Insurance Agency sells housing protection products, including voluntary homeowners’ and manufactured housing policies, and other insurance products. Assurant expects the transaction to close in the first quarter of 2017, subject to the satisfaction of customary closing conditions and regulatory approval, and that the acquisition will have minimal impact to Assurant’s GAAP earnings in 2017.
As of Sept. 30, 2016, Green Tree Insurance Agency and the affiliated entities Assurant is acquiring in this transaction reported revenues for the nine months of approximately $31 million.
Assurant currently earns underwriting profits on the majority of Green Tree’s voluntary homeowners’ and manufactured housing insurance sales. Through this acquisition, Assurant will retain its existing book of voluntary insurance for home mortgage borrowers whose loans are serviced by Walter’s subsidiary, Ditech Financial Services, and will have the opportunity to write additional voluntary business for Ditech borrowers.
Assurant expects the acquisition to improve margins on the existing block of business and generate roughly $25 million of incremental annualized net earned premium and fee income in 2017, with the opportunity to grow the business over time.
Green Tree Insurance Agency, with offices in Rapid City, S.D., and St. Paul, Minn., will be an indirect, wholly-owned subsidiary of Assurant.
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