Bermuda-based Allied World Assurance Co., Ltd. has agreed to acquire Connecticut-based Darwin Professional Underwriters, Inc.
Darwin offers specialty and primary professional lines coverages, which include health care professional liability and niche errors and omissions. Darwin also has a business and technology model to underwrite small professional liability business, which is expected to complement Allied World’s large account, specialty insurance and reinsurance strategy.
Scott Carmilani, president and chief executive officer of Allied World, said the acquistion will “accelerate Allied World’s expansion of its U.S. specialty insurance operations.”
He said the deal will more than double Allied World’s presence in the U.S., particularly within the U.S. health care market.
Darwin’s President and Chief Executive Officer Stephen J. Sills, who has decided to retire upon the closing of the transaction, said he thinks Darwin will be further expanded as part of a larger global organization.
“We feel certain that what we have created at Darwin will quickly enhance Allied World’s name recognition in the U.S. in the specialty professional liability market,” Sills said.
Jack Sennott, Darwin’s chief financial officer, will become the chief operating officer of Darwin upon the closing of the transaction.
Under the terms of the merger agreement, security holders of Darwin will receive approximately $550 million in cash, or $32.00 per share, in exchange for 100 percent of their interests in Darwin Professional Underwriters, Inc.
The boards of directors of both companies have approved the transaction, which is subject to customary closing conditions, including obtaining various regulatory approvals and the approval of Darwin’s shareholders.
A subsidiary of Alleghany Corp. has agreed to vote 40 percent of the outstanding Darwin shares in favor of the transaction. The transaction is expected to be completed during the fourth quarter of 2008 and is anticipated to be accretive to Allied World’s earnings in the first full year after the closing.
Darwin member companies include Darwin Professional Underwriters, Inc., Darwin National Assurance Co. (DNA) and Darwin Select Insurance Co. (Darwin Select).
Allied World Assurance is a global provider of insurance and reinsurance solutions, with offices in Bermuda, the United States and Europe.
About Darwin Professional Underwriters, Inc.
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