Alleghany (Y) To Sell PacificComp To Copper Point Mutual
Zacks Investment Research | Sep 14, 2017 10:35PM ET
Alleghany Corporation (NYSE:Y) has reached an agreement to divest its Pacific Compensation Insurance Company (PacificComp), to Copper Point Mutual Insurance Company for a total cash consideration of $150 million. The transaction is expected to close at the end of this year.
PacificComp, a wholly owned subsidiary of Alleghany Insurance Holdings, LLC, was acquired by Alleghany in 2007. It provides workers’ compensation insurance coverage to companies located in California. PacificComp is responsible for a portion of Alleghany’s insurance operations. Post divestiture, an Alleghany subsidiary will continue to settle PacificComp’s pre-acquisition reinsurance claims.
The acquisition of PacificComp seems a perfect fit for CopperPoint Mutual Insurance Company that provides workers’ compensation insurance in Arizona. The acquisition will complement as well as add capabilities to the acquirer’s portfolio besides helping it to expand geographically. Per news releases, the combined entity will have $400 million in premiums, assets of about $4.1 billion and $1.5 billion in policyholder surplus. CopperPoint Mutual Insurance has $1.3 billion in surplus and assets worth more than $3.6 billion with no debts. This could help it in financing the acquisition.
PacificComp had been incurring significant underwriting losses over the last few quarters though it reported profits in second-quarter 2017.Continued underperformance could have induced the divestment. Alleghany strives to grow via acquisitions and organic initiatives as these diversify and strengthen its portfolio. We expect strong underwriting performances by TransRe and RSUI and CapSpecialty to continue to drive growth for Alleghany.
Zacks Rank & Share Price Movement
Alleghany carries a Zacks Rank #5 (Strong Sell). Shares of Alleghany have underperformed the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.