Dallas-based Hilltop Holdings Inc. and Align Financial Holdings LLC have entered into a definitive agreement for the sale of Hilltop subsidiary, National Lloyds Corp. (National Lloyds), to Align in an all-cash transaction valued at approximately $150 million, subject to post-closing adjustments.
Founded in 1948, National Lloyds is a Dallas-based specialty property insurer primarily serving owners of lower value homes and mobile homes. The company writes premiums through two subsidiaries, National Lloyds Insurance Co. and American Summit Insurance Co., and also has wholly owned agency and services businesses, including Nalico General Agency.
National Lloyds has an established distribution network of approximately 3,900 independent agencies and active licenses in more than 40 states.
Concurrent with the purchase of National Lloyds, Align has entered into a definitive agreement for the sale of the carriers — National Lloyds and American Summit Insurance — to ReAlign Insurance Holdings LLC (ReAlign) in an all-cash transaction.
ReAlign is an insurance holding company formed by ReAlign Capital Strategies LLC and private investment fund, MGI Insurance Holdings Inc. As part of the transaction, the agencies retained by Align, or their affiliates, will enter into various agreements with the carriers to provide services, including acting as a program underwriting manager and claims administrator for the carriers post-transaction.
The transaction has been approved by the boards of directors of Hilltop, Align and ReAlign and the parties expect the transaction to close in the second quarter of 2020, subject to customary closing conditions, including required regulatory approvals.
The Associated Press reported Hilltop on Jan. 30 reported fourth-quarter earnings of $49.3 million. The insurance holding company posted revenue of $452.1 million in the period. Its revenue net of interest expense was $410.6 million for the quarter.
For the year, the company reported profit of $225.3 million and revenue of $1.65 billion.
Piper Sandler & Co. is acting as exclusive financial advisor to Hilltop Holdings and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Hilltop Holdings in connection with the transaction.
Durham Jones & Pinegar P.C. is serving as legal counsel to Align Financial Holdings in connection with the transaction.
Source: Hilltop Holdings Inc.
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