Tower Group, Inc. has closed its merger with Canopius Holdings Bermuda Limited. Tower is now an indirect wholly-owned subsidiary of Canopius Bermuda. The later has changed its name to Tower Group International, Ltd. (Tower Ltd.), right after the merger closed.
The shareowners of Tower had been given 1.1330 shares of Tower Ltd. for each share owned.
The shares of Tower Ltd. have been listed on the NASDAQ with the ticker symbol “TWGP” which it was allowed to retain. While the merged entity retained the ticker symbol of Tower Group, the shares have a new CUSIP number and the share price has been adjusted to account for stock conversion.
Via the merger Tower will gain access to the Bermuda platform which would provide competitive advantage to support growth opportunities in U.S. and international markets. Tower expects a combined gross premium written of $2.3 billion in 2013, taking into account business accretion from Canopius.
Post merger Tower’s Assumed Reinsurance business will be underwritten from the Bermuda office utilizing the staff acquired from the merger with Canopius and supplemented by other Bermuda personnel. Other businesses will be created using the Bermuda platform. In the U.S. the company will continue to focus on building commercial, specialty and personal lines business with continuing reinsurance support from the Bermuda based reinsurance affiliate. Tower will also continue to participate in Lloyd’s business through ownership in and expanded reinsurance relationship with Canopius and continue to support other Lloyd’s syndicates.
The merger is expected to provide a long term return on equity of 13% to 15%.
Tower currently retains a Zacks Rank #2 (Buy).