Toronto-based Kingsway Financial Services Inc. has agreed to sell Zephyr Insurance Co., Inc. to Zephyr Acquisition Co., an acquisition vehicle of Ocean Harbor Holding Inc. and MP Holdings LLC, a Hawaiian based investor group.
The transaction is expected to be completed during the fourth quarter of 2009 subject to the receipt of regulatory approvals.
Zephyr is a specialty property insurance company that insures Hawaii homeowners against catastrophic loss due to hurricanes.
For the first six months of 2009, Zephyr had gross premiums written of approximately $36 million, or 7 percent of the premiums of the Kingsway group of companies, and produced an underwriting profit.
Kingsway anticipates receiving initial gross proceeds from the transaction of $31.5 million U.S., plus a contingent, deferred earn-out amount.
Kingsway focuses on non-standard automobile insurance in North America. The company operates through wholly-owned insurance subsidiaries in Canada and the U.S. It has been consolidating, laying off workers, and selling off some non-core assets to recover from larger-than-expected losses and to restore the company’s financial condition.
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