We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Arch Capital to Buy Watford Holdings in a Cash Transaction
Read MoreHide Full Article
Arch Capital Group Ltd. (ACGL - Free Report) agreed to acquire Watford Holdings Ltd. (WTRE - Free Report) for $622 million in cash. Pending approval, the transaction is expected to culminate in the first quarter of 2021.
Watford Holdings is a multi-line Bermuda reinsurance company. Arch Capital acquired 11% stake in Watford Holdings for $100 million in 2014. As of Jun 30, 2020, Arch Capital owned a 13% stake in Watford Holdings. Notably, Watford Holdings is considered a variable interest entity and Arch Capital believes that it is the primary beneficiary of Watford Holdings.
Per the definitive agreement, Watford Holdings’ shareholders will receive $31.10 per share in cash, a 74% premium to Watford Holdings’ closing price on Sep 8, 2020. Arch Capital decided to fund the buyout through available cash.
The Zacks Rank #3 (Hold) insurer has made significant efforts to boost its inorganic growth through strategic acquisitions. These, in turn, helped it expand internationally, add capabilities, enhance operations and diversify business. In February 2020, Arch Capital inked a deal with France-based corporate and investment bank Natixis to buy a 29.5% stake in the trade-credit insurance firm Coface for $520 million. The acquisition is in tandem with the acquirer’s efforts to develop uncorrelated sources of underwriting income.
Post closure, the acquired entity will continue to operate as a standalone business and remain consolidated within Arch Capital’s financials. Watford Holdings stands to gain from Arch Capital’s underwriting strength.
Shares of Arch Capital have lost 24.6% year to date compared with the industry's decline of 7.9%. Efforts to diversify the Mortgage Insurance business via strategic acquisitions that also complement strength in the specialty insurance and reinsurance businesses, and strong capital position should help shares bounce back.
There has been a host of acquisitions in the insurance space of late, given the significant capital available. Stewart Information Services Corporation (STC - Free Report) acquired 57 title offices in the states of Arizona, Colorado and Nevada from ET Investments for $105 million. Arthur J. Gallagher & Co. (AJG - Free Report) acquired The Merriam Agency.
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.
Image: Bigstock
Arch Capital to Buy Watford Holdings in a Cash Transaction
Arch Capital Group Ltd. (ACGL - Free Report) agreed to acquire Watford Holdings Ltd. (WTRE - Free Report) for $622 million in cash. Pending approval, the transaction is expected to culminate in the first quarter of 2021.
Watford Holdings is a multi-line Bermuda reinsurance company. Arch Capital acquired 11% stake in Watford Holdings for $100 million in 2014. As of Jun 30, 2020, Arch Capital owned a 13% stake in Watford Holdings. Notably, Watford Holdings is considered a variable interest entity and Arch Capital believes that it is the primary beneficiary of Watford Holdings.
Per the definitive agreement, Watford Holdings’ shareholders will receive $31.10 per share in cash, a 74% premium to Watford Holdings’ closing price on Sep 8, 2020. Arch Capital decided to fund the buyout through available cash.
The Zacks Rank #3 (Hold) insurer has made significant efforts to boost its inorganic growth through strategic acquisitions. These, in turn, helped it expand internationally, add capabilities, enhance operations and diversify business. In February 2020, Arch Capital inked a deal with France-based corporate and investment bank Natixis to buy a 29.5% stake in the trade-credit insurance firm Coface for $520 million. The acquisition is in tandem with the acquirer’s efforts to develop uncorrelated sources of underwriting income.
Post closure, the acquired entity will continue to operate as a standalone business and remain consolidated within Arch Capital’s financials. Watford Holdings stands to gain from Arch Capital’s underwriting strength.
Shares of Arch Capital have lost 24.6% year to date compared with the industry's decline of 7.9%. Efforts to diversify the Mortgage Insurance business via strategic acquisitions that also complement strength in the specialty insurance and reinsurance businesses, and strong capital position should help shares bounce back.
There has been a host of acquisitions in the insurance space of late, given the significant capital available. Stewart Information Services Corporation (STC - Free Report) acquired 57 title offices in the states of Arizona, Colorado and Nevada from ET Investments for $105 million. Arthur J. Gallagher & Co. (AJG - Free Report) acquired The Merriam Agency.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks’ 2020 Election Stock Report
In addition to the companies you learned about above, we invite you to learn more about profiting from the upcoming presidential election. Trillions of dollars will shift into new market sectors after the votes are tallied, and investors could see significant gains. This report reveals specific stocks that could soar: 6 if Trump wins, 6 if Biden wins.
Check out the 2020 Election Stock Report >>