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Navigators Group to Broaden Base in Europe With Buyouts

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The Navigators Group, Inc has announced to acquire Assurances Continentales - Continentale Verzekeringen NV ("ASCO") and Bracht, Deckers & Mackelbert NV ("BDM") for €35 million cash. The transaction is expected to complete in the first half of 2018.

ASCO is a specialty insurer offering marine and property and casualty insurance. While BDM is an insurance underwriting agency, underwriting risk coverage in niche markets on behalf of ASCO and other major international insurers. Both companies are based in Antwerp, Belgium.  

Per the agreement, Navigators Group will also take over Canal Re SA, a wholly-owned subsidiary of ASCO and a reinsurance company based in Luxembourg.    

The acquisition will help Navigators Group consolidate its presence in the European Union’s single market. The acquirer considers Europe an important base for international growth and thus this buyout is in sync with its strategy. The company announced its intent to merge its existing European underwriting operations with BDM.

Navigators Group adopts strategic takeovers as a prudent approach to ramp up its growth profile. It has grown from a U.S. Marine underwriter to a global specialty insurer and reinsurer over the years. A solid balance sheet with increasing liquidity and declining debt continues to support the company to invest in a slew of growth initiatives.

Shares of Navigators Group have underperformed the industry year to date. The stock has lost 15.9% compared with the industry’s rally of 17.7%. We expect the company’s planned acquisitions, expanding its international exposure and adding capabilities to its portfolio, to help the shares rebound.

 


 

Navigators Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.  

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