DAILY NEWS May 2, 2012 9:46 AM - 0 comments

Intact to acquire JEVCO for $530 million

TEXT SIZE bigger text smaller text

Intact Financial Corporation (TSX: IFC) has entered into an agreement to acquire JEVCO Insurance Company from The Westaim Corporation (TSX: WED) for $530 million.

JEVCO is a provider of specialty and niche products for individuals and businesses in Canada with approximately $350 million in direct premiums written in 2011 (based on industry data and public disclosure).

JEVCO provides specialized insurance products to individuals such as recreational vehicles (motorcycles, snowmobiles and all-terrain vehicles), non-standard auto insurance and niche products in business insurance. The company operates mainly in Quebec, Ontario and Alberta.

The transaction is expected to close sometime this fall. The boards of both Intact and Westaim have approved the deal and it is conditional upon, among other things, the approval of Westaim's shareholders and the receipt of the required regulatory approvals.

Charles Brindamour, CEO of Intact Financial Corporation, said the transaction would complement the company’s offering of insurance solutions to consumers and brokers.

“The acquisition will allow us to expand our offering to brokers by providing them the opportunities to offer their clients complementary specialized products such as recreational vehicle insurance,” Brindamour said. “It will also broaden our offering of specialty lines products to businesses.”

IFC intends to finance the acquisition and related transaction expenses from a combination of the proceeds of approximately $226 million bought deal subscription receipt financing, funds to be advanced under its existing revolving credit facility or other committed senior unsecured financing arranged by IFC for this purpose and a portion of its existing cash resources.

IFC expects to maintain its strong capital position on closing with an estimated MCT above 200% in the near term and a debt to total capital ratio estimated to remain below its target level of 20%.

Horizontal ruler

Note: By submitting your comments you acknowledge that Canadian Underwriter has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever. Please note that due to the volume of e-mails we receive, not all comments will be published and those that are published will not be edited. However, all will be carefully read, considered and appreciated.

comments powered by Disqus