AmTrust to Invest $42 Million in ACAC Acquisition of GMAC P/C Insurance

October 21, 2009

AmTrust Financial Services, Inc. is making an investment in American Capital Acquisition Corp. in connection with the acquisition by ACAC of GMAC’s U.S. consumer property/ casualty insurance business.

AmTrust said it will initially invest approximately $42.5 million in a convertible preferred security.

GMAC’s consumer property/ casualty insurance unit sells automobile coverages through independent agents in the U.S. It utilizes a network of 10,500 agents in 12 core markets, as well as exclusive relationships with 23 affinity partners.

GMAC’s U.S. consumer property/ casualty insurance business had net written premium in excess of $1 billion in 2008 that encompassed all 50 states. Its coverages include standard/preferred auto, RVs, non-standard auto and commercial auto. The investment includes 10 statutory insurance companies that write the automobile coverages for GMAC.

American Capital Acquisition Corp. is an affiliate of American Capital
Partners, LLC, a newly formed acquisition corporation. The principal of ACAC was a founder of AmTrust Financial Services, Inc. and Maiden Holdings, Ltd.

“This investment is not only a very attractive preferred equity investment for AmTrust, but it provides strong strategic advantages as well,” said Barry Zyskind, president and CEO of AmTrust.

He cited as gains the the immediate access to a new distribution force of 10,500 agents that could cross sell AmTrust products, along with the fee income the investment could generate for Amtrust.

The acquisition is subject to regulatory approval and is expected to close in the first quarter of 2010.

AmTrust Financial Services, Inc., headquartered in New York City, is a multinational insurance holding company.

Source: AmTrust Financial Services, Inc.

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