Hallmark Financial Services Acquires Heath Group

September 3, 2008

Hallmark Financial Services Inc. acquired 80 percent of the outstanding membership interests in Heath XS LLC and Hardscrabble Data Solutions LLC (collectively referred to as “Heath Group”) for cash consideration of $15 million. The transaction was completed using existing holding company capital.

The Heath Group is a Basking Ridge, N.J.-based underwriting facility that annually produces approximately $50 million of lower hazard, middle market, excess commercial automobile and commercial umbrella risks on both an admitted and non-admitted basis through a network of wholesalers throughout the United States.

Jeffrey L. Heath, an insurance industry veteran with over 30 years of reinsurance and excess underwriting experience, founded the Heath Group and its predecessor entity in 1991. Philo Smith & Co. acted as exclusive financial advisor and broker to Heath Group on this transaction.

Mark J. Morrison, CEO and president of Hallmark, said, “We are very excited about this acquisition and the superior underwriting and risk assessment expertise within their focused niche that the Heath Group brings to Hallmark. … We expect this acquisition to be immediately accretive to earnings and to build upon synergies that exist with Hallmark’s current operations.”

Jeffrey L. Heath, president of the Heath Group said, “We are pleased with the agreement we have reached with Hallmark and look forward to a partnership that will provide tremendous value to Hallmark’s shareholders.”

Source: Hallmark Financial Services

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