The Hartford’s cash deal to buy rival Navigators is expected to close in the first half of 2019
This week saw another big insurance merger with The Hartford’s agreement to buy Navigators.
The deal between the two US insurers expands the Hartford’s specialty book and global footprint.
Navigators underwrites marine, construction and energy business, and includes a Lloyd’s market presence through its Syndicate 1221.
It also brings its acquirer a growing underwriting book in Europe, Asia and Latin America.
“We are excited to announce the acquisition of Navigators, which we are confident will achieve key strategic and financial objectives for The Hartford,” said Hartford’s chairman and CEO, Christopher Swift.
“It expands our product offerings and geographic reach and adds tenured and proven underwriting and industry talent while strengthening our value proposition to agents and customers,” said Swift.
For the seller, the $2.1bn price tag for the cash deal is equivalent to 1.8x Navigators’ fully diluted tangible book value and is worth $70 per Navigators share.
Navigators’ board and management have already approved The Hartford’s bid.
“This transaction will result in the realization of significant value for our stockholders,” said Stan Galanski, Navigators’ president and CEO.
“It is a testament to the caliber and dedication of our people and the strength of our underwriting culture,” Galanski added.
The deal is just the latest acquisition for Hartford.
Last year the insurer agreed to buy Aetna’s US life and disability business for $1.45bn, and the previous year it bought, Maxum, a small Georgia-based specialty insurer.
The Navigators acquisition is expected to close in the first half of 2019.
The deal is expected to reduce The Hartford’s 2019 earnings, the company said, but add $30-75m net income in 2020.
Swift said: “We are optimistic about our combined growth opportunities and expect the acquisition to generate attractive returns.
Hartford was advised on the transaction by investment banks Citigroup and Deutsche Bank, and law firm Mayer Brown.
Navigators was advised by Goldman Sachs, Moelis, and Sidley Austin.