AmTrust Financial Services, Inc. announced Friday that it received final regulatory approval for a California-based surety writer, The Insco Dico Group, and completed the $88.7 million acquisition.
AmTrust said the purchase price is approximately $7.0 million above Insco Dico’s tangible book value as of Dec. 31, 2013.
The transaction was funded with existing working capital.
In a statement about the deal, AmTrust Financial Services, Inc. President and CEO, Barry Zyskind said “Insco Dico significantly enhances the Company’s presence in the domestic surety bonds market and expands our operations with new insurance products, additional distribution and unique industry expertise.”
“As the improving trends in the economy and housing market continue, we expect the demand for Insco Dico’s surety bonds will increase, providing additional value to AmTrust and its shareholders,” he added.
Insco Dico’s subsidiaries include Developers Surety and Indemnity Company and Indemnity Company of California, which offer surety insurance to developers and contractors in all 50 states with California as the largest state. In addition, Insco Dico’s subsidiary, Builders Insurance Services, markets general liability insurance policies to contractors in several western states.
In 2013, Insco Dico generated approximately $52.0 million in insurance premium, AmTrust reported.
FBR Capital Markets & Co. served as financial advisor to AmTrust.
Source: AmTrust Financial Services, Inc.