M&A

RICHMOND, Va. and HOUSTON, Feb. 1, 2017 /PRNewswire/ — Markel Corporation (“Markel”) (NYSE: MKL) and SureTec Financial Corp. (“SureTec”) announced today that they have entered into a definitive agreement for Markel to acquire SureTec for approximately $250 million, inclusive of a three-year earn out. The transaction is subject to customary closing conditions, including insurance regulatory approvals, and is expected to close in the first half of 2017. Following the acquisition, SureTec will operate as a separate business unit, with John T. Knox, Jr., SureTec’s current Chairman and Chief Executive Officer, leading his seasoned team in his current capacity. The operating unit will become part of Markel’s Specialty division and US Insurance segment. Richard R. Whitt, Co-Chief Executive Officer of Markel, commented, “We are very excited to have John and the SureTec team join Markel. Since its start in 2002, SureTec has grown its surety business prudently and profitably 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. As with all our acquisitions, we look forward to exploring opportunities to profitably grow the business.” John T. Knox, Jr., Chairman and Chief Executive Officer of SureTec, remarked, “We could not be happier to be joining Markel. I look forward to leading what will become Markel Surety and building upon SureTec’s success while benefiting from Markel’s financial strength and (re)insurance capabilities, which will position us to better serve our customers and grow our business.” TigerRisk Capital Markets & Advisory served as financial advisor and Sidley Austin LLP served as legal advisor to Markel. Locke Lord LLP served as legal advisor to SureTec. About Markel Corporation Markel Corporation is a diverse financial holding company serving a variety of niche markets. The Company’s principal business markets and underwrites specialty insurance products. In each of the Company’s businesses, it seeks to provide quality products and excellent customer service so that it can be a market leader. The financial goals of the Company are to earn consistent underwriting and operating profits and superior investment returns to build shareholder value. Visit Markel Corporation on the web at markelcorp.com. About SureTec Financial Corp. SureTec is one of the largest privately owned surety companies in the US. SureTec’s largest subsidiary, SureTec Insurance Company, is rated A (Excellent) by A.M. Best. In partnership with professional surety producers and independent agents, the company has offices in Atlanta, Austin, Dallas, Houston, San Antonio, San Diego, and Orange County, California. SureTec operates in 50 states and has one international affiliate. Visit SureTec on the web at suretec.com.

General Indemnity Group, LLC, (“GIG”), a subsidiary of Boston Omaha Corporation (OTC: BOMN), announced today that it has completed the previously disclosed acquisition of United Casualty and Surety Insurance Company (“UCS”), of Quincy, Massachusetts. UCS is a leading provider of both contract and commercial surety products, and has earned a reputation for strength and service with its agents and clients. The business and its employees will remain in their current location outside of Boston, under the continued leadership of Todd Carrigan. As a surety specialist since 1989, United Casualty and Surety has solutions for any situation, offering innovative structures and terms for even the most difficult cases. For more information on UCS, or for any surety needs, please visit: www.unitedcasualty.com This acquisition continues GIG’s entry in the surety space, after its purchase earlier this year of The Warnock Agency, whose site www.EZSuretyBonds.com offers bonds in all 50 states. General Indemnity Group, LLC General Indemnity Group, LLC, and its subsidiaries offer a broad range of insurance and related services. For more information on General Indemnity, please visit: www.gi.insure. United Casualty and Surety Insurance Company United Casualty and Surety Insurance Co., is a leading provider of both contract and commercial surety products. Established in 1989, UCS has a financial strength rating of A- (excellent) from A.M. Best, and is approved by the United States Department Treasury for Federal Bonds. http://www.businesswire.com/news/home/20161207006299/en/

Canada-based Fairfax Financial Holdings, a property and casualty re/insurer, is acquiring Allied World Assurance Company Holdings for $4.9 billion in cash and stock as the two companies have entered into a merger agreement approved by their boards. The offer price represents a premium of 18 percent to the closing price of $45.77 per Allied World Share on December 16, 2016. Allied World will operate within the Fairfax group on a decentralized basis after closing. The acquisition will diversify Fairfax’s group risk portfolio, and Allied World will leverage from Fairfax’s presence in the international re/insurance markets. Allied World’s growing international reach is highly complementary to Fairfax’s existing worldwide operations and the acquisition further diversifies Fairfax’s group risk portfolio, a press release said. In addition, Allied World will be able to leverage Fairfax’s expertise in Canada, the United States and international insurance and reinsurance markets, thus enhancing Allied World’s global product offering and providing it with expanded underwriting opportunities and support. “We are excited to have Allied World join the Fairfax group,” said Prem Watsa, chairman and chief executive officer (CEO) of Fairfax. “Allied World is a high-quality company with an excellent long-term track record and an outstanding management team led by Scott Carmilani. We are looking forward to supporting Scott and the entire team at Allied World in growing their business over the long-term.” Carmilani, the CEO and Chairman of Allied World, added: “This is a tremendous opportunity for Allied World. Our shareholders are being rewarded for the strong performance of Allied World over the last 10 years since going public. “We are strategically aligning ourselves with Fairfax, one of the premier companies in the insurance industry which has a great track record of supporting their operating companies and creating value for shareholders. We are excited to be joining the Fairfax organization – we share their passion for underwriting excellence and their entrepreneurial approach to growing the business with a long-term orientation. “Our shareholders will benefit from Fairfax’s tremendous investment capabilities as demonstrated by its superior long-term investment track record. The success of Fairfax’s decentralized approach in empowering their management teams to drive profitable underwriting and combining Fairfax’s investment philosophy will position us to create long-term value for shareholders,” he continued. Fairfax provides a great home for Allied World to continue to build a strong business for our customers, business partners and employees.” http://www.intelligentinsurer.com/news/fairfax-financial-acquires-allied-world-for-4-9bn-10595?utm_source=Insurance&utm_campaign=eee83840b8-Intelligent_Insurer_Daily_19_12_2016&utm_medium=email&utm_term=0_f246694353-eee83840b8-27488653

Liberty Mutual Insurance has agreed to acquire specialty lines insurer Ironshore Inc. from China’s Fosun International Limited. Liberty Mutual will acquire a 100 percent ownership interest in Ironshore. According to the announcement, the purchase price will equate to 1.45x Ironshore’s actual tangible book value as of year-end 2016, and is estimated to be approximately $3 billion. The purchase price is subject to closing price adjustments. Once the transaction is closed, Ironshore will continue to operate with CEO Kevin H. Kelley, the same management team and brand name, but as part of the larger Liberty Mutual organization, which is growing its specialty lines operations. The transaction is expected to close in the first half of 2017. “Ironshore has a track record of profitably underwriting global and diverse specialty risks insurance and is an ideal complement to Liberty Mutual, providing additional scale, expertise, innovation and market relationships to our $5 billion global specialty business,” said David H. Long, Liberty Mutual chairman and CEO. Ironshore CEO Kelley called the transaction “beneficial for all three parties involved” in a statement. “We have aimed for the best possible outcome for our employees, clients and business partners and are confident this transaction achieves these goals and more,” he said. “Ironshore will become part of another ‘A’ rated company with a global reach, a strong balance sheet, wide client base and a much greater capacity to drive profitable growth. In Ironshore, Liberty will gain access to a profitable specialty insurer that will enhance Liberty’s current specialty markets profile. The transaction also speaks to the value of the Ironshore franchise and to Liberty’s view of the value that the management team brings to their organization,” Kelley said. New York-based Ironshore, which was founded in 2006, had gross premiums written of $2.2 billion in 2015 and is among the largest excess and surplus lines insurers in the U.S. The company, which has approximately 800 employees located in 15 countries worldwide, is organized into three operating hubs based in the United States, Bermuda and London. Last November, China’s Fosun International Ltd. paid $1.84 billion for the remaining 80 percent stake of Ironshore Inc. that it did not already own when it became a 20 percent owner earlier in the year. Last December, officials at the Committee on Foreign Investment in the United States (CFIUS), a government unit that oversees deals over national security concerns, contacted Fosun with concerns over how Fosun would operate Ironshore’s Wright & Co., which provides professional liability coverage to U.S. government employees including the Central Intelligence Agency, even though Wright was a small portion of Ironshore’s overall business. After that inquiry, Fosun delayed its initial public offering of Ironshore. The conflict was apparently eliminated last month when Starr Companies agreed to acquire Wright USA from Ironshore. Starr Companies is headed by Maurice Greenberg, former CEO of American International Group (AIG). According to a spokesperson for Ironshore, the Wright acquisition by Starr has closed and the acquisition of Ironshore by Liberty Mutual does not affect this transaction. In July 2015, A.M. Best placed Ironshore under review with negative implications due to the then-planned $1.84 billion acquisition of Ironshore by Fosun. A.M. Best said it was worried about Fosun’s credit profile and financial leverage and how it would affect the insurer. However this past June, A.M. Best changed its mind and restored the financial strength ratings of “A” (Excellent) and issuer credited ratings of “a” for Ironshore. A.M. Best said the affirmation of its ratings nearly a year later reflected its view “that Ironshore has strong standalone attributes as a specialty insurer, will continue to build a relevant franchise in the specialty sector and is capable of delivering strong operating results.” However, A.M. Best said that negative outlook will hang over Ironshore for the foreseeable future due to “the drag related to the credit profile and high debt leverage measures” Fosun has. Fosun has accumulated significant debt in a 20-year acquisition spree, mostly in Europe and the United States. Ironshore was founded in December, 2006 by Robert Clements with more than $1 billion in private equity backing. Kelley joined the firm as CEO from Lexington Insurance, AIG’s surplus lines insurer, in 2008. Boston-based Liberty Mutual is a diversified insurer with operations in 29 countries. As of December 31, 2015, Liberty Mutual had $121.7 billion in consolidated assets, $102.5 billion in consolidated liabilities, and $37.6 billion in annual consolidated revenue. Its growing surplus lines operation, Liberty International Underwriters, operates in 18 countries. In 2014, Liberty International contributed 16 percent of the company’s $36.3 billion in net written premium for the year.