The Hartford Financial Services Group has agreed to sell its subsidiary Specialty Risk Services (SRS) to Sedgwick Claims Management Services (Sedgwick CMS) for $278m.
The Hartford expects to realize a capital gain of approximately $150m, after-tax, upon closing of the transaction. Credit Suisse served as the financial advisor to The Hartford.
The transaction is expected to close during the first quarter of 2011, subject to regulatory approval and other required consents. Sedgwick CMS plans to extend comparable employment offers to all direct SRS employees, as of closing.
SRS, a wholly-owned subsidiary of The Hartford, is one of the third-party claims administrators providing self-insured, insured, and alternative market clients with customized claims services.
The Hartford chairman, president and CEO Liam McGee said that the sale of SRS is consistent with the company’s strategy to focus The Hartford on core protection and wealth management businesses.
"This transaction accomplishes the goal of creating shareholder value without impacting the earnings power of the company," McGee said.
Sedgwick CMS CEO Dave North said Sedgwick CMS and SRS share remarkably similar philosophies on issues of quality and accountability for client results.