Ambac Financial Group has entered into an agreement to acquire 80% of the membership interests of each of Xchange Benefits and Xchange Affinity Underwriting Agency, collectively Xchange.
P&C Managing General Underwriter (MGU) Xchange will continue operating under its existing brand as it seeks to expand its underwriting partnership with its key carriers in connection with its planned growth strategy.
Ambac’s acquisition will enable Xchange to grow through its geographic and product diversification, accelerating its strategic plans.
Ambac’s platform diversification strategy includes building a dynamic platform with both admitted and non-admitted carriers, as well as MGAs and MGUs.
Debevoise & Plimpton acted as legal advisor and UBS Investment Bank acted as financial adviser to Ambac on the transaction.
Claude LeBlanc, Ambac’s President and CEO, said: “As part of our broader specialty program insurance strategy we have been actively pursuing acquisition opportunities in the MGU and Managing General Agent (MGA) sector.
“We expect the acquisition of Xchange to be immediately accretive to Ambac and allow us to use our net operating losses. We also believe that the acquisition furthers Ambac’s commitment to unlocking long-term shareholder value by generating recurring fee-based income with attractive risk adjusted returns.
“The Xchange team has delivered outstanding underwriting results for their carrier partners and we look forward to welcoming the team to the Ambac family.”
Peter McGuire, Xchange’s President and Chief Executive Officer, added: “We are thrilled to be joining the Ambac family as they transition to the specialty program market.
“This transaction provides us with a strategic partner plus access to permanent capital that will accelerate our planned growth strategy and Ambac will benefit from a proven, established niche MGU with a history of consistently strong operating results and carrier support.”