United Fire Group Divets Its Affiliate To Kuvare US Holdings
Zacks Investment Research | Sep 26, 2017 08:44AM ET
United Fire & Casualty Company, an affiliate of United Fire Group, Inc. (NASDAQ:UFCS) , has reached a definitive agreement to divest its subsidiary United Life Insurance Company to Kuvare US Holdings, Inc. for a total cash consideration of $280 million. The divestiture is intended to intensify focus on its property and casualty business.
Details of the Deal
The sales consideration represents a multiple of 1.2 times GAAP book value and 1.4 times GAAP book value excluding unrealized investment gains of Kuvare US Holdings. United Fire intends to utilize the sale proceeds capital deployment like, share repurchases, payment of both regular as well as extraordinary dividends to shareholders and strategic buyouts.
The transaction is anticipated to culminate in the first-half of 2018, subject to mandatory closing conditions and regulatory approvals.
This divestment will enable the company to further build on the success of its property and casualty operations. This in turn will position the company for increased profitability, consolidate financial performance as well as boost shareholders value.
With the sale, United Fire Group will continue to invest in its successful property and casualty as well as surety operations including enterprise analytics and a new multi-year technology platform, which will enhance its core underwriting decisions and productivity.
On the other hand, Kuvare US Holdings will benefit from United life’s exceptional employees’ deep distribution relationships and complementary product portfolio. This in turn will add capabilities to better serve its clients and distribution partners.
United Fire Group strives to grow via divestitures and organic initiatives as these diversify and strengthen its portfolio. The company will be able to concentrate in its core business segment which would poise it for its future growth and profitability thereby, strengthening its financial performance and enhancing value for shareholders.
United Fire Group strives to grow via divestitures and organic initiatives as these diversify and strengthen its portfolio. The company will be able to concentrate in its core business segment which would poise it for its future growth and profitability thereby, strengthening its financial performance and enhancing value for shareholders.
Share Price Movement
Shares of United Fire Group have outperformed the industry in a year’s time. While United Fire Group shares have gained 9.3%, the industry has registered an increase of 27.1%.Strategic acquisitions and disciplined capital management are expected to drive the stock higher in future.
Insurers are considering acquisitions and divestures to streamline operations, focus on core competency, add capabilities and expand internationally. This month Alleghany Corporation (NYSE:Y) had reached an agreement to divest its Pacific Compensation Insurance Company to Copper Point Mutual Insurance Company. Brown & Brown, Inc (NYSE:BRO) via its subsidiary, Pacific Resources Benefit Advisors, LLC, had closed the buyout of all the assets of Herronpalmer LLC to strengthen its foothold in the employee benefit program administration. Arthur J. Gallagher & Co. (NYSE:AJG) has recently acquired Premier Insurance, LLC to shore up its Australian presence.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax (NYSE:EFX) announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Get The News You Want
Zacks Investment Research
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.