Arch Capital Group to Acquire Altus Holdings

March 26, 2001

Arch Capital Group has entered into a definitive agreement to acquire all of the capital stock of one of its current investee companies, Altus Holdings, Ltd. Altus, a privately held company, provides insurance and alternative risk transfer services through rent-a-captive and other facilities.

The Altus group includes First American Insurance Company, an admitted insurer with licenses in 49 states and an A.M. Best rating of A-. Altus’ management team is led by David May, formerly a managing director at J&H Marsh & McLennan, Inc. where he was responsible for risk management services, including the management of captive insurance companies. Under the agreement, the company will acquire the remaining ownership interests in Altus for a purchase price of approximately $36 million.

The transaction is contingent on obtaining applicable regulatory approvals, expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary closing conditions. Upon closing of the acquisition, Arch Capital will be able to assist producers, managers and distributors of insurance premium seeking to participate in the underwriting results of their business or requiring a licensed carrier.

The company will also be able to provide services to businesses that are seeking to insure a portion of their corporate risk exposures with a captive insurance company. In addition, the company, together with its merchant bank, Hales & Company, and Distribution Partners, the private equity fund Hales manages, can provide financial advisory services and capital to insurance entities seeking a buyer, an acquisition candidate or financing.

Topics Mergers

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