AmTrust Financial Services, Inc. Enters Agreements to Sell Shares in National General Holdings Corp.
June 09 2017 - 8:30AM
AmTrust Financial Services, Inc. (Nasdaq:AFSI)
(the “Company” or “AmTrust”) announced today that
it has entered into agreements to sell 10,586,000 shares it owns in
National General Holdings Corp. (Nasdaq:NGHC) (“NGHC” or “National
General”) for approximately $211.7 million.
AmTrust has agreed to sell 10,586,000 common
shares of NGHC at a price of $20.00 per share (representing a
discount of 8.3% to NGHC’s common stock closing market price on the
Nasdaq Stock Exchange on June 8, 2017) through separate, privately
negotiated purchase agreements with unaffiliated third parties.
The carrying value of the shares being sold was
approximately $135 million as of March 31, 2017. The pre-tax gain
on the sale of the shares will be approximately $76 million
(pending AmTrust’s proportional share of NGHC’s earnings through
the date of the sale). AmTrust will invest the funds from the sale
in accordance with both the Company’s overall corporate investment
guidelines as well as individual subsidiary’s investment
guidelines.
AmTrust has held an ownership interest in NGHC
since 2010. The Company’s total invested capital in its equity
investment in NGHC is approximately $53 million and its adjusted
cost base is approximately $38 million as of March 31, 2017.
“We are taking the initiative to sell National
General shares in order to simplify our balance sheet and
investment portfolio composition. Our investment in National
General has delivered meaningful returns, as National General’s
business has grown over the past several years,” said Adam
Karkowsky, Executive Vice President and Chief Financial Officer,
AmTrust. “We appreciate the opportunity that our former Chairman
Michael Karfunkel provided us to participate as a co-investor in
NGHC’s equity.”
NGHC is a publicly-held specialty personal lines
insurance holding company that operates twenty-two insurance
companies in the United States and provides a variety of insurance
products, including personal and commercial automobile, homeowners
and umbrella, and supplemental health.
No Solicitation
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy any securities nor
shall there be any sale of any securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.
About AmTrust Financial Services,
Inc.
AmTrust Financial Services, Inc., a
multinational insurance holding company headquartered in New York
City, offers specialty property and casualty insurance products,
including workers' compensation, commercial automobile, general
liability and extended service and warranty coverage through its
primary insurance subsidiaries rated "A" (Excellent) by A.M. Best.
For more information about AmTrust visit www.amtrustgroup.com.
Forward-Looking Statements
This news release contains certain
forward-looking statements that are intended to be covered by the
safe harbors created by the Private Securities Litigation Reform
Act of 1995. When we use words such as “anticipate,” “intend,”
“plan,” “believe,” “estimate,” “expect,” or similar expressions, we
do so to identify forward-looking statements. Examples of
forward-looking statements include the plans and objectives of
management for future operations, including those relating to
future growth of our business activities and availability of funds,
projections of the impact of potential errors or misstatements in
our financial statements, and estimates of the impact of material
weaknesses in our internal control over financial reporting, and
are based on current expectations that involve assumptions that are
difficult or impossible to predict accurately and many of which are
beyond our control. Actual results may differ materially from those
expressed or implied in these statements as a result of significant
risks and uncertainties, including, but not limited to, non-receipt
of expected payments from insureds or reinsurers, changes in
interest rates, a downgrade in the financial strength ratings of
our insurance subsidiaries, the effect of the performance of
financial markets on our investment portfolio, the amounts, timing
and prices of any share repurchases made by us under our share
repurchase program, development of claims and the effect on loss
reserves, accuracy in projecting loss reserves, the cost and
availability of reinsurance coverage, the effects of emerging claim
and coverage issues, changes in the demand for our products, our
degree of success in integrating acquired businesses, the effect of
general economic conditions, state and federal legislation,
regulations and regulatory investigations into industry practices,
the impact of known or potential errors or misstatements in our
financial statements, our ability to timely and effectively
remediate the material weaknesses in our internal control over
financial reporting and implement effective internal control over
financial reporting and disclosure controls and procedures in the
future, risks associated with conducting business outside the
United States, the impact of Brexit, developments relating to
existing agreements, disruptions to our business relationships with
Maiden Holdings, Ltd. or National General Holdings Corp., breaches
in data security or other disruptions with our technology,
heightened competition, changes in pricing environments, and
changes in asset valuations. Additional information about these
risks and uncertainties, as well as others that may cause actual
results to differ materially from those projected, is contained in
our filings with the SEC, including our Annual Report on Form 10-K
and our quarterly reports on Form 10-Q. The projections and
statements in this news release speak only as of the date of this
release and we undertake no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
For more information, please contact:
AmTrust Financial Services, Inc.
Chaya Cooperberg
Chief Communications Officer & SVP Corporate Affairs
chaya.cooperberg@amtrustgroup.com
646.458.3332
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