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Posted on 15 Jan 08
Australia's QBE announced that it has signed a definitive agreement to acquire North Pointe Holdings Corporation, a NASDAQ listed, US-based P/C insurance group. The acquisition is subject to the approval of regulatory authorities and North Pointe's shareholders.
"North Pointe writes approximately US$150 million of gross written premium in specialist markets involving owner-operated small and mid-sized restaurants, bars, taverns, small grocery and convenience stores, bowling centers, automobile repair facilities, artisan contractors, roller skating centers and forestry," the announcement noted.
It distributes its products through a network of over 1,900 independent and affiliated agents. QBE said it would pay US$16.00 per share, for a total purchase price of US$146 million, approximately 1.6 times estimated shareholders' funds at December 31, 2007. The acquisition will be funded from existing excess capital held in the U.S.
President & CEO QBE the Americas, Tim Kenny commented: "The acquisition of North Pointe is complementary to our recent U.S. acquisitions and further increases our distribution through independent and affiliated agents."
QBE's Group CEO Frank O'Halloran added: "the acquisition will meet QBE's acquisition criteria including earnings per share accretion in year one. It will also enable us to achieve further synergies with our existing business. Subject to unforeseen circumstances, we anticipate a combined operating ratio in the low 90's in 2009."
Kenny also indicated that "the acquisition of North Pointe strengthens QBE's position in the specialty insurance market in the U.S. North Pointe's partner agents and customers can be reassured that we will continue to provide superior products and services backed by QBE's highly rated, financially stable companies."
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