Stone Point Capital, the Karfunkel Family and Barry Zyskind Chief Executive Officer (CEO) of AmTrust Financial Services have revealed plans to acquire AmTrust Financial Services for an increased offer of $13.50 per share in cash, a premium increase of 13% compared to their previous proposal.
In January, the Karfunkel-Zyskind Family had made an offer for all the shares they didn’t already own for $12.25 per share in cash, which represented a 20.8% premium over AmTrust’s closing stock price on January 8, 2018.
The transaction now represents a premium of 33% to AmTrust’s unaffected closing common stock price on January 9th, 2018.
AmTrust’s Board of Directors has unanimously approved the proposed merger based on the Special Committee of the Board of Directors’ recommendation.
Don DeCarlo, Chairman of the Special Committee, said; “the Special Committee and its advisors conducted an independent process and careful review of the proposal, with a focus on obtaining the best outcome for public shareholders.
“We believe the proposal delivers immediate and certain value for public shareholders at a significant premium to the unaffected share price and we encourage public shareholders to support the transaction.”
The proposed merger is anticipated to close in the second half of 2018, subject to satisfaction or waiver of the closing conditions and approval by shareholders and regulators.
AmTrust Financial Services has entered into a definitive agreement with Evergreen Parent, L.P., an entity formed by private equity funds managed by Stone Point Capital together with the Karfunkel-Zyskind Family.
Under the terms of the proposed merger, Evergreen Parent will acquire about 45% of the Company’s issued and outstanding common shares not presently owned by the Karfunkel-Zyskind Family and affiliates.
The transaction values the fully diluted equity of the Company at approximately $2.7 billion, excluding the Company’s outstanding preferred stock.
Zyskind said; “I believe that this transaction represents an exciting step forward for AmTrust, our employees, and the agents, brokers, partners, and customers we serve. As a private enterprise, we will be able to focus on long-term decisions, without the emphasis on short-term results.”
The Karfunkel-Zyskind Family and certain of its affiliates and related parties said they plan to rollover their shares in the Company for interests in Evergreen Parent.
Each share of the Company’s currently outstanding preferred stock will remain outstanding and it is expected that they will continue to be listed on the New York Stock Exchange following the consummation of the transaction.
Deutsche Bank Securities acted as financial advisor to the Special Committee and BofA Merrill Lynch as financial advisor to AmTrust.
Willkie Farr & Gallagher LLP has been legal advisor to the Special Committee; Skadden, Arps, Slate, Meagher & Flom LLP were Stone Point’s legal advisors.
Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisors to the Karfunkel-Zyskind Family.
