StarStone US Holdings Inc. acquired Jeffrey L. Heath, Inc. from Hallmark Financial Services, Inc. for $40 million.
October 06, 2022
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StarStone US Holdings Inc. entered into an agreement to acquire Jeffrey L. Heath, Inc. from Hallmark Financial Services, Inc. (NasdaqGM:HALL) for $40 million on September 30, 2022. The business acquired from Hallmark Financial Services, Inc. (Hallmark) represents that portion of Hallmark's Specialty Commercial Segment that is distributed through the wholesale insurance brokerage channel (Hallmark E&S). Core Specialty will not acquire any insurance company entities as part of the transaction and the transaction excludes loss reserves associated with the Hallmark E&S business which will be retained by Hallmark. Core Specialty has drawn $130 million under its Unsecured Revolving Credit Facility to support future business to be underwritten by Hallmark E&S and to pay the $40 million cash purchase price. Gerald A. Dupre, currently President and Chief Underwriting Officer of Hallmark's Specialty Commercial Segment, will join Core Specialty as part of the transaction in a leadership role within the combined excess & surplus lines business. Management and the approximately 176 employees of the Hallmark E&S business, based in Dallas, Atlanta and Jersey City, New Jersey, will transition to Core Specialty. Core Specialty expects the transaction to be accretive to its earnings per share and return on equity in 2023.
J.P. Morgan Securities LLC acted as financial advisor and Todd E. Freed, Jon A. Hlafter, Cheryl Bunevich, Page Griffin, Anne E. Villanueva, James Talbot, Russell Wohl and Patrick J. Lewis of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to Starstone U.S. Holdings, Inc. Raymond James & Associates, Inc. (Raymond James) rendered financial advisory services to the Company in connection with the transaction. The Board of Directors of the Company also engaged Raymond James to provide an opinion as to whether the transaction consideration received by the Company is fair, from a financial point of view to Hallmark. Steve Wolosky and Michael R. Neidell of Olshan Frome Wolosky LLP served as legal counsels to Hallmark in connection with the transaction.
StarStone US Holdings Inc. completed the acquisition of Jeffrey L. Heath, Inc. from Hallmark Financial Services, Inc. on September 30, 2022.
Hallmark Financial Services, Inc. is an insurance holding company, which is engaged in the sale of property/casualty insurance products to businesses and individuals. The Companyâs business includes marketing, distributing, underwriting, and servicing its insurance products, as well as providing other insurance related services. Its segments include Commercial Lines, Personal Lines and Runoff. The Standard Commercial Segment includes the package and monoline property/casualty and the Aviation business unit, which offers general aviation property/casualty insurance products and services. The Personal Segment includes the non-standard personal automobile and renters insurance products and services. The Runoff Segment consists of its Specialty Runoff business unit, which consists of the senior care facilities liability insurance business, the contract binding line of primary automobile insurance, and the satellite launch property/casualty insurance products, as well as specialty programs.