AmTrust Financial Services will buy Texas-based property/casualty insurer Republic Companies, Inc. for $233 million, continuing an ongoing strategy of growth through strategic acquisitions. The purchase also gives it an expansion path into the Southwestern United States.

Pending regulatory approval, the deal will close during the 2016 first half. It covers Republic, plus its affiliates from Delek Group Ltd. and Republic Insurance Holdings. Republic has been a property/casualty insurance carrier for more than 100 years, and it mostly does business in the Southwestern U.S. It also generates revenue by providing insurance services to third parties, according to the deal announcement.

Republic reported total direct premiums of $711 million in 2014.

AmTrust President and CEO Barry Zyskind said that the Republic business will be “an excellent addition” to AmTrust’s property/casualty and service and fees business. He added in prepared remarks that it will generate “great opportunities for profitable growth,” particularly in Republic’s “key Southwestern markets.”

News of the planned Republic acquisition comes less than two months after AmTrust announced it would snatch up Nationale Borg-Maatschappij (Nationale Borg), a Dutch reinsurer of surety and trade credit insurance, for $167.9 million.

Other acquisitions include AmTrust’s March deal to acquire ARI Mutual Insurance, giving it access to a number of regional commercial insurance products and related distribution channels.

AmTrust plans to pay for its Republic purchase with $113 million in cash and a $105 million note issued by AmTrust to Dalek Group, which will carry a 5.75 percent annual interest rate, a four-year maturity, and cash payments to be made over five years.

AmTrust is a New York-based multinational insurance holding company.
Source: AmTrust Financial Services Inc.