The deal for Altamont Capital Partners to acquire Topa Insurance Group has been called off.
Last August, Altamont Capital Partners signed an agreement to acquire Calabasas, Calif.-based Topa Insurance Group from its long-time owner, Topa Equities Ltd. While Altamont was to assume majority control, Topa Equities was to maintain a minority equity stake in the business.
The change in plans prompted rating agency AM Best to remove from under review with developing implications and affirm the financial strength rating of A- (Excellent) and the Long-Term Issuer Credit Ratings of “a-” of Topa Insurance Co. and its subsidiary, Dorchester Insurance Co., which is located in the U.S. Virgin Islands.
AM Best called the termination of the deal a “mutual agreement.”
Topa and Altamont both confirmed that the deal is off without any further comment or explanation.
“While it is correct that the deal for Altamont to acquire Topa Insurance has been mutually, and amicably, called off, we don’t have any further comments beyond that,” an Altamont spokesperson told Insurance Journal..
Topa wrote $130 million of gross written premium in 2018 that it sold through wholesale brokers and managing general agents. The specialty writer is focused primarily on commercial lines and niche market program business.
In December, Topa Insurance Group President and CEO John Donahue announced his resignation effective at the end of this year. Donahue relocated to Southern California nearly six years ago to lead Topa, and his decision to resign was a personal one, according to the company.
Donahue cited one reason: his commute from his home in San Francisco to the Topa offices in Calabasas: “The commute from the Bay Area to Southern California has been particularly difficult on my family. The decision to resign came out of a commitment I made to increase the quality of my life, though I will miss all of the people I have had the pleasure of working with.”
Michael Day, a member of the Topa Insurance Group Board of Executives, has assumed the position of president and CEO. Day has more than 35 years of financial and business experience, including 12 years serving as the chief financial officer of CSAA Insurance.
In January, Donahue joined Stockton-based surplus lines brokerage M.J. Hall & Co. Inc. as president.
Altamont Capital Partners is a private investment firm based in the San Francisco area with more than $2.5 billion of assets under management. Along with Altamont’s current investments in Embark General, Kuvare Holdings, and Accelerant Holdings, Topa would have been Altamont’s seventh platform investment in insurance and insurance services and its 19th overall insurance acquisition.
“Topa will serve as our foundational specialty P&C insurance carrier business in the U.S. and we believe our expertise in the space will drive numerous opportunities for growth over the coming years,” said Keoni Schwartz, managing director at Altamont, at the time the agreement was announced.
Founded by John E. Anderson in 1956, Topa Equities Ltd. is a private, family-owned, diversified holding company. Headquartered in Los Angeles, the company owns more than 25 subsidiaries with primary locations in Southern California, Hawaii and the U.S. Virgin Islands. Topa has four main lines of business: beverage distribution, automotive retail, insurance and real estate.
*This story ran previously in our sister publication Insurance Journal.