Validus Holdings Announces Agreement with Archer Daniels Midland to Acquire ADM Crop Risk Services Business
January 30 2017 - 4:15PM
Business Wire
Validus Holdings, Ltd. (“Validus” or the “Company”) (NYSE:VR)
announced today that they have reached an agreement with Archer
Daniels Midland Company (“ADM”) (NYSE:ADM) for the purchase of
ADM’s Crop Risk Services business (“CRS”). The transaction includes
a marketing services agreement under which ADM and Validus will
work together to continue to offer a full range of insurance and
farm products and services to CRS customers.
CRS is a primary crop insurance general agent based in Decatur,
Illinois with $548.9 million gross premiums written for the 2016
reinsurance year and 1,170 agents across 36 states. Validus intends
to have CRS operate as part of the Western World Insurance
Group.
Ed Noonan, Validus’ Chairman and Chief Executive Officer,
stated, “I’m very pleased to welcome CRS to Validus. CRS is a high
quality crop insurance provider that has achieved excellent growth
in recent years. Validus will benefit from CRS’s commitment to
provide superior customer service to agents and farmers via their
leading technology capabilities. The addition of CRS complements
Validus’ existing agriculture book and participation in this market
is a logical step as Validus continues to expand our presence in
U.S. primary specialty lines. We are excited by the long–term
partnership with ADM as this transaction further provides the
unique opportunity of a marketing services agreement with one of
the largest agricultural processors in the world.”
Joe Taets, President of ADM’s Agricultural Services Business
Unit, stated, “We’re pleased to have reached an agreement that
includes a marketing services agreement that will allow ADM and
Validus to work together to continue to offer customers a full
array of crop insurance products as well as ADM’s grain marketing
services. We are pleased to have found a buyer in Validus that is
committed to running—and growing—the business, and we look forward
to continuing to work with Validus and the CRS sales team and their
customers across the country.”
Under the terms of the transaction, ADM will receive $127.5
million in cash, subject to certain working capital and balance
sheet adjustments in exchange for 100% of the outstanding stock of
CRS. Validus intends to use cash on hand to fund the transaction.
Validus anticipates the closing to take place during the second
quarter of 2017 and is subject to obtaining required regulatory
approvals and the satisfaction of other customary closing
conditions.
Goldman, Sachs & Co. is acting as financial advisor to
Validus and Skadden, Arps, Slate, Meagher & Flom LLP is acting
as legal counsel.
Investor Presentation
An investor presentation detailing the transaction is available
on Validus’ website at www.validusholdings.com.
About Validus Holdings,
Ltd.
Validus Holdings, Ltd. (“Validus”) is a holding company for
reinsurance and insurance operating companies and investment
advisors including Validus Reinsurance, Ltd. (“Validus Re”), Talbot
Holdings Ltd. (“Talbot”), Western World Insurance Group, Inc.
(“Western World”) and AlphaCat Managers, Ltd. (“AlphaCat”). Validus
Re is a Bermuda based reinsurer focused on short tail lines of
reinsurance. Talbot is the Bermuda parent of the specialty
insurance group primarily operating within the Lloyd's insurance
market through Syndicate 1183. Western World is a U.S. specialty
lines insurance company focused on excess and surplus lines.
AlphaCat is a Bermuda based investment adviser managing capital for
third parties and Validus in insurance linked securities and other
property catastrophe reinsurance investments.
About ADM Crop Risk
Services
ADM Crop Risk Services (“CRS”) is a primary crop insurance
general agent based in Decatur, Illinois. CRS was established in
1982 as ASI AgriServe Inc. In 2010, ADM acquired 100 percent of the
shares of ASI, and the company became ADM Crop Risk Services.
CRS aims to provide farmers with affordable crop income
protection, superior service and utmost integrity.
Cautionary Note Regarding
Forward-Looking Statements
This press release may include forward-looking statements, both
with respect to the Company and its industry, that reflect our
current views with respect to future events and financial
performance. Statements that include the words "expect", "intend",
"plan", "believe", "project", "anticipate", "will", "may" and
similar statements of a future or forward-looking nature identify
forward-looking statements. All forward-looking statements address
matters that involve risks and uncertainties, many of which are
beyond the Company's control. Accordingly, there are or will be
important factors that could cause actual results to differ
materially from those indicated in such statements and, therefore,
you should not place undue reliance on any such statements. We
believe that these factors include, but are not limited to, the
following: 1) unpredictability and severity of catastrophic events;
2) rating agency actions; 3) adequacy of Validus' risk management
and loss limitation methods; 4) cyclicality of demand and pricing
in the insurance and reinsurance markets; 5) statutory or
regulatory developments including tax policy, reinsurance and other
regulatory matters; 6) Validus' ability to implement its business
strategy during "soft" as well as "hard" markets; 7) adequacy of
Validus' loss reserves; 8) continued availability of capital and
financing; 9) retention of key personnel; 10) competition; 11)
potential loss of business from one or more major insurance or
reinsurance brokers; 12) Validus' ability to implement,
successfully and on a timely basis, complex infrastructure,
distribution capabilities, systems, procedures and internal
controls, and to develop accurate actuarial data to support the
business and regulatory and reporting requirements; 13) general
economic and market conditions (including inflation, volatility in
the credit and capital markets, interest rates and foreign currency
exchange rates); 14) the integration of businesses Validus may
acquire or new business ventures Validus may start; 15) the effect
on Validus' investment portfolios of changing financial market
conditions including inflation, interest rates, liquidity and other
factors; 16) acts of terrorism or outbreak of war; and 17)
availability of reinsurance and retrocessional coverage, as well as
management's response to any of the aforementioned factors.
The foregoing review of important factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included herein and elsewhere,
including the risk factors included in Validus' most recent reports
on Form 10-K and Form 10-Q and other documents of the Company on
file with or furnished to the U.S. Securities and Exchange
Commission (“SEC”). Any forward-looking statements made in this
press release are qualified by these cautionary statements, and
there can be no assurance that the actual results or developments
anticipated by Validus will be realized or, even if substantially
realized, that they will have the expected consequences to, or
effects on, Validus or its business or operations. Except as
required by law, the Company undertakes no obligation to update
publicly or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170130005964/en/
Investors:Validus Holdings,
Ltd.investor.relations@validusholdings.com+1-441-278-9000orMedia:Brunswick
GroupCharlotte Connerton / Mustafa Riffat+1-212-333-3810
Validus Holdings, Ltd. (delisted) (NYSE:VR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Validus Holdings, Ltd. (delisted) (NYSE:VR)
Historical Stock Chart
From Apr 2023 to Apr 2024