Karfunkel-Zyskind Family To Buy AmTrust For $2.7B In Cash
Zacks Investment Research | Mar 05, 2018 09:53PM ET
Shares of AmTrust Financial Services, Inc. (NASDAQ:AFSI) lost 2.1% in the last couple of trading sessions following the announcement that Evergreen Parent will buy 45% of the company’s stake, which Karfunkel-Zyskind Family does not own at present. The deal is valued at $2.7 billion.
Evergreen Parent, L.P. is an entity formed by private equity funds managed by Stone Point Capital LLC along with Barry D. Zyskind, chairman and CEO, AmTrust, George Karfunkel and Leah Karfunkel (collectively, the Karfunkel-Zyskind Family). The Karfunkel-Zyskind Family had earlier announced its intention to acquire AmTrust’s shares on Jan 9, 2018.
Per the deal value, shareholders of AmTrust will receive $13.50 in cash for each share held, up from the previous offer of $12.25. The new offer represents 33% premium to the closing price on the aforementioned date in January, this year. The transaction is estimated to culminate in the second half of 2018, subject to closing conditions.
Per Mr. Zyskind, chairman and CEO, AmTrust, this acquisition will likely help deepen the company’s focus on long-term growth objectives rather than concentrating on short-term results given that the company is transitioning into a private entity.
AmTrust has been pursuing strategic initiatives to help accelerate its growth profile. On Feb 28, AmTrust transferred 51% equity interest in some of its U.S.-based fee businesses to Madison Dearborn Partners. The divestiture is expected to expand the company’s capital base as well as well poise its business for sustained growth.
AmTrust’s leadership position in commercial small business space, expansion of other segments and an impressive inorganic growth story place it strongly for growth. The company also aims to make investments that reap returns in line with the sector.
Shares of AmTrust have outperformed the industry year to date. The stock has rallied 27.1% compared with the the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .
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