Markel Corp. will snatch up SureTec Financial Corp. for $250 million, in an acquisition deal designed to give it a leg up in the surety business.
The purchase agreement is inclusive of a three-year earn out, with plans to close the transaction sometime during the first half of 2017.
SureTec will operate post-acquisition as a separate business unit (eventually as Markel Surety), and Chairman and CEO John T. Knox, Jr. will continue to lead his team. Organizationally, SureTec will become part of Markel’s Specialty division and U.S. Insurance segment.
Right now, SureTec already operates in all 50 states and has one international affiliate. In the U.S., SureTec’s officers are in Atlanta, Austin, Dallas, Houston, San Antonio, San Diego and Orange County, Calif.
Richard Whitt, Markel’s co-chief executive officer, said the acquisition was a good one for the financial holding company, which focuses primarily on specialty insurance products.
“Since its start in 2002, SureTec has grown its surety business prudently and profitability with a diversified product and geographic mix. It has become a top 20 player in the surety market nationwide through its offerings of contract, commercial and court bonds,” Whitt said in prepared remarks. “As with all our acquisitions, we look forward to exploring opportunities to profitably grow the business.”
Knox, meanwhile, said he sees the acquisition as a way for SureTec to grow more than it would have on its own.
“We could not be happier to be joining Markel,” Knox said, also in prepared remarks. “I look forward to leading what will become Markel Surety and building upon Suretec’s success while benefiting from Markel’s financial strength and [insurance/reinsurance] capabilities, which will position us to better serve our customers and grow our business.”