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.