Validus to buy Western World for $690m

Bermuda-based Validus has agreed a deal to buy US specialty lines insurer Western World Insurance Group for $690 million.

The transaction values the insurer at 1.33 times its GAAP book value of $518.3 million as of March 31, 2014.

Validus said it intends to use existing funds for the transaction which it anticipates will close during the third quarter of 2014.

The current management team will continue to lead the business.

Ed Noonan, Validus’ chairman and chief executive officer (CEO), said: “I am very pleased to welcome Western World to the Validus Group and am excited about the potential of combining these two companies. Bringing together Validus, a leader in the short-tail insurance and reinsurance market, and Western World, with its excellent US distribution platform, outstanding management and industry leading technology, creates a franchise that will provide compelling products and services for our customers.”

Tom Mulligan, Western World’s CEO, added: “Joining Validus is a great outcome for Western World. Validus brings capital and expertise in short tail classes of business which will advance the competitive advantages in all of our underwriting divisions. My colleagues and I look forward to working with Validus to provide additional products and capacity to our agents and customers.”