AmTrust Workers Compensation
Good news for AmTrust as Stone Point Capital and Karfunkel Family to buy back the 45% of common shares. This move will bring AmTrust back from being under review to stable within the A.M. Best #: 051002 rating system. This purchase is bringing significant improvement in balance sheet strength. That is exciting news for AmTrust as they are the leader in Workers Compensation space.
AmTrust Financial Press Released March 1st, 2018
NEW YORK, March 01, 2018 (GLOBE NEWSWIRE) — AmTrust Financial Services, Inc. (Nasdaq:AFSI) (“AmTrust” or the “Company”) announced today that it has entered into a definitive agreement with Evergreen Parent, L.P., an entity formed by private equity funds managed by Stone Point Capital LLC (“Stone Point”), together with Barry D. Zyskind, Chairman and CEO of AmTrust, George Karfunkel and Leah Karfunkel (collectively, the “Karfunkel-Zyskind Family”), in which Evergreen Parent will acquire the approximately 45% 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. The transaction values the fully diluted equity of the Company at approximately $2.7 billion, excluding the Company’s outstanding preferred stock.
Under the terms of the proposed merger, AmTrust common shareholders who are not affiliated with the Karfunkel-Zyskind Family (the “Public Shareholders”) will receive $13.50 in cash for each share of AmTrust common stock they hold. This represents a premium of 33% to the Company’s unaffected closing common stock price on January 9, 2018, the last trading day before Stone Point and the Karfunkel-Zyskind Family announced their proposal to acquire all of the outstanding common shares of AmTrust that the Karfunkel-Zyskind Family did not already own or control. The Karfunkel-Zyskind Family and certain of its affiliates and related parties will rollover their shares in the Company for interests in Evergreen Parent. Each share of the Company’s currently outstanding preferred stock will remain outstanding and it is expected that they will continue to be listed on the New York Stock Exchange following the consummation of the transaction.
The proposed merger is anticipated to close in the second half of 2018, subject to satisfaction or waiver of the closing conditions, including approval by regulatory authorities and the Company’s shareholders, including approval by a majority of the shares of the Company not owned or controlled by the Karfunkel-Zyskind Family, their children, senior management or their respective affiliates and certain related parties. The Company will file a Current Report on Form 8-K with the Securities and Exchange Commission which will more fully describe the terms and conditions of the proposed merger.
AmTrust’s Board of Directors has unanimously approved the proposed merger based upon the unanimous recommendation of a Special Committee of the Board of Directors, which was composed of independent directors not affiliated with the Karfunkel-Zyskind Family and advised by its own financial and legal advisors. The Special Committee and the Board each recommend that the Company’s Public Shareholders approve the merger and adopt the merger agreement.
Don DeCarlo, Chairman of the Special Committee, said: “The Special Committee and its advisors conducted an independent process and careful review of the proposal, with a focus on obtaining the best outcome for public shareholders. We believe the proposal delivers immediate and certain value for public shareholders at a significant premium to the unaffected share price and we encourage public shareholders to support the transaction.”
Mr. Zyskind, Chairman and CEO of AmTrust, said: “I believe that this transaction represents an exciting step forward for AmTrust, our employees, and the agents, brokers, partners, and customers we serve. As a private enterprise, we will be able to focus on long-term decisions, without the emphasis on short-term results.”
Mr. Zyskind continued, “The year 2018 marks the 20th anniversary of AmTrust’s founding. Alongside Stone Point Capital, a strong partner widely recognized as an experienced investor in the insurance sector, the Karfunkel-Zyskind family is deeply committed to the long-term strength and success of AmTrustWe are well-positioned to continue meeting our policyholders’ needs, supporting our brokers and agents, and developing our partner relationships.”
Jim Carey, Senior Principal of Stone Point Capital, said: “Stone Point is excited to be partnering with the Karfunkel-Zyskind family and AmTrust’s management team in the next phase of AmTrust’s growth. AmTrust has built its business through an innovative spirit and dedication to their employees, customers and partners. Under Barry Zyskind’s leadership, AmTrust will continue to invest in long-term growth initiatives and continue to support their policyholders, agents and brokers.”
Deutsche Bank Securities Inc. is serving as financial advisor to the Special Committee and BofA Merrill Lynch is serving as financial advisor to AmTrust.
Willkie Farr & Gallagher LLP is acting as legal advisor to the Special Committee, Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to Stone Point and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to the Karfunkel-Zyskind Family.
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