AmTrust Financial Services has sealed a deal to become a private company, after first disclosing plans to do so in early January.
“This transaction represents an exciting step forward for AmTrust, our employees and the agents, brokers, partners and customers we serve,” AmTrust Chairman and CEO Barry Zyskind said in prepared remarks. “As a private enterprise, we will be able to focus on long-term decisions without the emphasis on short-term results.”
The transaction is expected to conclude in the 2018 second half, pending regulatory and shareholder approvals. AmTrust’s board of directors has unanimously approved the company’s plans.
The deal calls for Stone Point Capital Partners, Zyskind, Director George Karfunkel and his wife, Leah Karfunkel, to acquire the 45 percent of AmTrust shares that they, and other entities, don’t already own or control. They’re doing so under a corporate entity named Evergreen Parent L.P.
Shareholders not affiliated with the Karfunkel-Zyskind family will get $13.50 in cash for each share of AmTrust common stock they own, a 33 percent premium above the company’s unaffected closing common stock price on Jan. 9, 2018, the last trading day before the bid to take AmTrust private was announced. As well, the Karfunkel-Zyskind family and some of its affiliates will roll over shares of their company for interest in Evergreen Parent.
Each share of AmTrust’s currently outstanding preferred stock will remain outstanding and still be listed on the New York Stock Exchange after the deal is complete.
AmTrust has struggled in recent years, though it has taken a number of steps to stabilize itself. On Feb. 28, the company announced it has closed the transfer of a 51 percent stake in some of its U.S.-based fee business to Madison Dearborn Partners, a private equity investment firm. The transaction is expected to make about $950 million for AmTrust. The company also raised $300 million in new capital last year from the Zyskind family and sold its personal lines policy management system to National General Holdings for $200 million.
Source: AmTrust Financial Services