San Francisco-based Sutter Holding Company Inc. announced that it has closed on the previously announced acquisition of Diversified Risk Insurance Brokers, a commercial property and casualty insurance broker based in Emeryville, California. Payment consisted of a combination of cash and common stock. In connection with the acquisition of Diversified, Sutter obtained a term loan from the Bank of Alameda in the amount of $2 million. The loan has a fixed interest rate of 8 percent, and is amortized over 10 years with a balloon payment due in five years. We simultaneously closed on the private placement of approximately $1.5 million in Series A Preferred stock, which will be used to retire debt and for general corporate purposes.
In connection with the closing of the Diversified acquisition, Sutter expanded its board of directors and reorganized its management team. In addition to the board seat to which the Series A Preferred shareholders are entitled, the former owners of Diversified Risk will be entitled to appoint two directors to Sutter’s board. The board has also nominated Jim Corroon to the board of directors, in a special meeting on Jan. 24. Corroon accepted the nomination on Jan. 26. Corroon is the former chairman and CEO of Corroon & Black, a global insurance brokerage firm that merged with the Willis Group.
In the special meeting on Jan. 24, the board also named R. Michael Collins president and CEO, named William G. Knuff, III chairman of the board, and named Robert E. Dixon vice-chairman and chief investment officer. Collins will also retain his directorship, and Mr. Knuff will retain the chief financial officer title. Collins, Knuff, and Dixon accepted these appointments and executed amended Employment Agreements to reflect the changes on Jan. 26.
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