Florida-based FedNat Holding Company is set to acquire the homeowners insurance operations of 1347 Property Insurance Holdings in a cash and stock transaction valued at approximately $51 million.
As per the deal, FedNat will acquire Maison Insurance Company, Maison Managers, Inc., and ClaimCor LLC (collectively, Maison).
Maison is a property and casualty insurer focused on the coastal homeowners’ markets in Louisiana and Texas, with additional operations in Florida.
For the nine months ended September 30, 2018, Maison reported gross written premium of $70.6 million and total statutory surplus of $35.6 million as of that date.
“Maison represents a unique opportunity to accelerate the diversification of our predominantly Florida homeowners’ book into Louisiana and coastal Texas, two states where we have already been operating and have been looking for additional growth opportunities,” said Michael H. Braun, FedNat’s Chief Executive Officer.
“The transaction is a great financial and strategic fit for FedNat. The acquisition is a digestible size and efficiently financed. Based on meaningful reinsurance and operating expense synergies, we expect the acquisition to be immediately accretive to earnings per share.”
“Strategically, the deal diversifies our book and enhances our platform for further geographic expansion through direct access to non-Florida agents, which complements our existing wholesale distribution in Texas and Louisiana.”
Douglas Raucy, President of Maison added, “We are very excited about working with Michael and the team at FedNat, which should serve as an excellent partnership for our insurance company.”
“FedNat shares our vision for profitably growing property and casualty business through measured geographic expansion and further cultivating value-added relationships with agency partners. We look forward to continuing to execute our strategic plan under the Maison brand with the support, expertise and financial strength of our new partners at FedNat.”
As a result of the transaction, 1347 PIH’s insurance operations will become wholly-owned subsidiaries of FedNat.
Raucy as well as Dean Stroud, Chief Underwriting Officer of 1347 PIH, are expected to become employees of FedNat as of the closing.