Folksamerica Acquires Sierra Insurance Group from Sierra Health Services, Inc.
November 25 2003 - 7:53PM
PR Newswire (US)
Folksamerica Acquires Sierra Insurance Group from Sierra Health
Services, Inc. NEW YORK, Nov. 25 /PRNewswire-FirstCall/ --
Folksamerica Holding Company, Inc. announced today that it has
entered into a definitive agreement to acquire the Sierra Insurance
Group companies -- California Indemnity Insurance Company and its
three subsidiaries -- from Nevada-based Sierra Health Services,
Inc. . Under the terms of the agreement, Folksamerica will pay
$79.5 million, which includes $15.5 million in cash and a $64
million purchase note, the principal of which will be adjusted over
its six-year term to reflect favorable or adverse loss reserve
development on the acquired reserve portfolio and runoff of
remaining policies in force. The acquired companies' net assets at
September 30, 2003 were approximately $90 million. Following the
closing, Folksamerica will place the companies into runoff.
Folksamerica is not acquiring any infrastructure or employees in
the transaction and all of the companies' runoff administration
will be transferred to third party administrators working under
Folksamerica's direction. "We are very pleased with the terms of
this transaction put together by our Folksamerica Solutions
operation in Simsbury, Connecticut and with our ability to assist
Sierra in reaching their goal of exiting the property casualty
business so that it may focus on its ongoing core operations," said
Steve Fass, Folksamerica's Chief Executive Officer. "We are taking
on a well-reserved portfolio with substantial down-side protection
and we expect to extract significant economic value from this
transaction over time." Folksamerica Holding Company, Inc., parent
company of Folksamerica Reinsurance Company, a multi-line broker
market reinsurer, is a wholly owned subsidiary of White Mountains
Insurance Group, Ltd. (NYSE:WTM). With $1 billion in capital, the
company ranks among the top U.S. broker market reinsurance
companies. Additional information and other items of interest
regarding Folksamerica are available at the company's web site
located at http://www.folksamerica.com/. Additional financial
information and other items of interest regarding White Mountains
are available at White Mountains' web site located at
http://www.whitemountains.com/. Sierra Health Services, Inc. is a
Las Vegas-based diversified health care services company that
operates health maintenance organizations, indemnity and workers'
compensation insurers, military health programs, preferred provider
organizations and multi-specialty medical groups. Sierra's
subsidiaries serve over 1.2 million people through health benefit
plans for employers, government programs and individuals. For more
information, visit the company's website at
http://www.sierrahealth.com/. Safe Harbor Statement under the
Private Securities Litigation Reform Act of 1995 This press release
may contain "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. All statements, other than
statements of historical facts, included or referenced in this
release which address activities, events or developments which we
expect or anticipate will or may occur in the future are
forward-looking statements. The words "believe," "intend,"
"expect," "anticipate," "project," "estimate," "predict" and
similar expressions are also intended to identify forward-looking
statements. These forward-looking statements include, among others,
statements with respect to White Mountains': * growth in book value
per share or return on equity; * business strategy; * financial and
operating targets or plans; * incurred losses and the adequacy of
its loss and loss adjustment expense reserves; * projections of
revenues, income (or loss), earnings (or loss) per share,
dividends, market share or other financial forecasts; * expansion
and growth of its business and operations; and * future capital
expenditures. These statements are based on certain assumptions and
analyses made by White Mountains in light of its experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors believed to be
appropriate in the circumstances. However, whether actual results
and developments will conform with its expectations and predictions
is subject to a number of risks and uncertainties that could cause
actual results to differ materially from expectations, including: *
the continued availability of capital and financing; * general
economic, market or business conditions; * business opportunities
(or lack thereof) that may be presented to it and pursued; *
competitive forces, including the conduct of other property and
casualty insurers and reinsurers; * changes in domestic or foreign
laws or regulations applicable to White Mountains, its competitors
or its clients; * an economic downturn or other economic conditions
adversely affecting its financial position; * loss reserves
established subsequently proving to have been inadequate; and *
other factors, most of which are beyond White Mountains' control.
Consequently, all of the 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 White Mountains will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, White Mountains or its business or
operations. White Mountains assumes no obligation to update
publicly any such forward-looking statements, whether as a result
of new information, future events or otherwise. DATASOURCE:
Folksamerica Holding Company, Inc. CONTACT: Michael Tyburski of
Folksamerica Holding Company, +1-212-312-2503 Web site:
http://www.folksamerica.com/ http://www.whitemountains.com/
http://www.sierrahealth.com/
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