Zurich Financial Services subsidiary Farmers Group has entered into an agreement to acquire 100% of the equity of US-based non-standard automotive insurer Bristol West Holdings.
Bristol West Holdings (BRW) provides liability and physical damage insurance, focusing exclusively on private passenger automobiles across the US, and specializing in the non-standard market. In 2006, it reported gross written premiums of around $600 million.
As part of the takeover, Farmers Group (FGI) will immediately sell the underlying insurance business to the Farmers Exchanges, which FGI manages but does not own.
Under the terms of the agreements, the holders of BRW common stock have been offered $22.50 per share in cash for their shares. The transaction represents an equity value of $712 million, exclusive of fees, and will result in the delisting of BRW from the NYSE.
Adding Bristol’s non-standard auto insurance business to the Farmers platform is a great fit and contributes to increase our outreach, said FGI chief executive officer Paul Hopkins. This is another important step in expanding the product range offered by the Exchanges and sustaining the positive growth and profit trends we have created in the last few years.
The closing of the transaction is subject to approval by BRW stockholders, applicable antitrust and insurance regulatory approvals, and other customary closing conditions. Reference shareholder Kohlberg Kravis Roberts & Co and its affiliates, which hold 42.18% of the stock of BRW, have already agreed to vote in favor of the transaction.