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21 June 2018Insurance

AmTrust shareholders approve go-private deal

AmTrust Financial Services stockholders have, at a  special meeting held today, June 21, 2018, approved the proposed  amended merger transaction which will take the insurer specialized in the coverage for small businesses private.

The deal will see Evergreen Parent, an entity formed by private equity funds managed by Stone Point Capital, together with Barry Zyskind, chairman and CEO of AmTrust, George Karfunkel and Leah Karfunkel, acquiring the approximately 45 percent of the company's issued and outstanding common shares that the Karfunkel-Zyskind Family and certain of its affiliates and related parties do not presently own or control.

AmTrust stockholders will receive $14.75 in cash for each share of AmTrust common stock they own. The transaction values the fully diluted equity of the company at approximately $2.95 billion, excluding the company's outstanding preferred stock. The transaction is expected to close during the second half of 2018, subject to the satisfaction of customary closing conditions, including approval by regulatory authorities.

The final vote showed that 79.8 percent of the outstanding common stock, representing 92.6 percent of the shares voted, were cast in favour of the merger.

With respect to the public stockholders, 67.4 percent of the total public stock outstanding, representing 81.5 percent of the public shares voted at the special meeting, were cast in favour of the merger.

"We are pleased with the outcome of today's vote,” Zyskind said. “In addition to maximizing value for our public stockholders, this transaction provides AmTrust with a strong partner in Stone Point. Together, as a private company, we will continue to serve our clients, agents, partners and policyholders with a focus on initiatives that will help them achieve success."

Jim Carey, senior principal of Stone Point Capital, said: "We look forward to working closely with management to help them drive their current operational initiatives and ultimately capitalize on the longer-term opportunities for the business."

AmTrust reported a net loss of $348.9 million for  2017 after a net profit of $430.4 million in 2016. Zyskind had previously argued that as a private enterprise AmTrust will be able to focus on long-term decisions, without the emphasis on short-term results. AmTrust wants to address financial controls as well as pricing and reserve adequacy issues.

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More on this story

10 August 2018   AmTrust Financial Services has posted a net loss of $96.9 million for the second quarter of 2018 after a net profit of $29.1 million in the same period of 2017 as the company goes private.
1 October 2018   Central Europe based investment group Arca Capital said that it will meet with state insurance regulators to oppose the AmTrust privatisation transaction and that it will continue to campaign aggressively against the "absurdly low" buyout price.
28 November 2018   AmTrust Financial Services has obtained all regulatory approvals to complete the $2.7 billion merger transaction with Evergreen Parent on Nov. 29 which will see the firm go private.