On May 2, Intact Financial Corporation announced it is acquiring JEVCO Insurance Company from The Westaim Corporation for $530 million.
Westaim said adjusting for the payment of a $30 million cash dividend paid by JEVCO to Westaim during the first quarter of fiscal 2012, the purchase price is approximately 1.38 times the net book value of JEVCO as at December 31, 2011.
JEVCO provides specialty and niche insurance products for Canadian businesses and individuals. In 2011, JEVCO had about $350 million in direct premiums written.
The transaction is expected to close during the fall of 2012. Intact said the transaction has been approved by boards of both companies and is conditional upon other factors, including the approval of Westaim’s shareholders. In a press release, Intact said Alberta Investment Management Corporation, on behalf of certain Funds whose investments it manages, Goodwood Inc. and the directors and executive officers of Westaim and JEVCO, have agreed to vote their Westaim shares (representing in aggregate approximately 48.6% of the outstanding common shares and approximately 53.7% of all outstanding shares entitled to vote at the special meeting of Westaim shareholders) in favour of the transaction. Westaim said it expects to mail the Circular to Westaim shareholders on or about June 8, 2012.
“The acquisition will allow us to expand our offering to brokers by providing them the opportunities to offer their clients complementary specialized products such as recreational vehicle insurance,” said Intact Financial’s CEO Charles Brindamour. “It will also broaden our offering of specialty lines products to businesses.”
“The sale of JEVCO represents a significant appreciation for Westaim’s shareholders,” said Cameron MacDonald, CEO of Westaim. “We expect this transaction to produce an attractive return to Westaim shareholders who participated in our equity financing at the time of the JEVCO acquisition in March 2010. The success of this transaction can be directly attributed to the hard work and dedication of Serge Lavoie, CEO of JEVCO, and his team.”