Intact Financial to buy Westaim unit for C$530 million
TORONTO (Reuters) - Intact Financial Corp IFC.TO will buy Jevco Insurance Co from Westaim Corp WED.TO for C$530 million ($538.5 million) to expand its already major presence in the Canadian property and casualty insurance sector.
Toronto-based Intact, which has been an acquisition leader in an industry that is facing fast consolidation, said on Wednesday that 48.6 percent of Westaim shareholders have agreed to vote for the deal.
Westaim, a Toronto-based holding company, bought Jevco from insurer Kingsway Financial Services Inc (KFS.TO: Quote) in 2010.
Jevco insures cars, motorcycles, and recreational vehicles such as snowmobiles and all-terrain vehicles. It had about C$350 million in direct premiums in 2011.
"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," Intact Chief Executive Charles Brindamour said in a statement.
Intact intends to finance the acquisition with an existing line of credit and through a bought deal to issue subscription receipts that is worth about C$226 million.
It has entered into an agreement with a group of underwriters, led by CIBC World Markets and TD Securities, to issue 3.6 million subscription receipts at C$62.75 each.
Intact, which was formerly the Canadian insurance arm of ING Groep, has already been busy on the acquisitions front, buying the Canadian operations of French insurer AXA last year for C$2.6 billion. Continued...