ACQUISITION OF CANADIAN GENERAL INSURANCE CO. COMPLETED BY MANAGEMENT GROUP AND KKR.TORONTO, Ontario--(BUSINESS WIRE)--JANUARY 26, 1995--Canadian General Insurance Group Ltd., a leading Canadian property casualty insurance company, announced today that it was acquired by a group organized by the company's management and the investment firm of Kohlberg Kravis Roberts Kohlberg Kravis Roberts & Co (commonly referred to as KKR) is a New York City-based private equity firm that focuses primarily on late-stage leveraged buyouts. It was founded in 1976 by Jerome Kohlberg, Jr., and cousins Henry Kravis and George R. & Co. (KKR KKR Korringa-Kohn-Rostoker (method) KKR Kohlberg, Kravis & Roberts & Co. KKR Kalkara (postal locality, Malta) KKR Kramers-Kronig Relations KKR Komarappa Gounder Ramalingam (hospital in India) ) for CAN$216.3 million. The acquisition is the first management-led buyout of a major Canadian insurance company and one of the largest management buyouts in Canada's history. "This transaction enables Canadian General to pursue its plans for growth as a stand-alone company stand-alone company An independent operating firm. For example, a large diversified firm may consider spinning off a subsidiary because, as a stand-alone company, the subsidiary would command a higher price-earnings ratio than the parent. , with a strengthened capital structure and the full support of a solid financial partner committed to its future," said Lew Dunn, Canadian General's Chief Executive Officer. "Over the past five years we have pursued a highly successful program of growth through acquisition, completing six transactions that have greatly enhanced the company's value. With this transaction providing a large management group with a significant equity stake in the company, we are more focused than ever on building on our accomplishments and achieving continued growth." "During a challenging period for the insurance industry, the fact that Canadian General has demonstrated a record of profitable growth and returns in the top quartile Quartile A statistical term describing a division of observations into four defined intervals based upon the values of the data and how they compare to the entire set of observations. Notes: Each quartile contains 25% of the total observations. of the industry is testament to the abilities of its excellent management team as well as its business franchise," said Saul Fox, general partner of KKR. "As an independent company, with an investment grade balance sheet and very strong operating fundamentals, we believe Canadian General will continue its distinguished record of achievement." "We are also pleased that this transaction furthers KKR's ongoing interest and presence in the insurance industry, where we continue to see good prospects for investment," Mr. Fox added. This transaction also marks KKR's first acquisition outside the U.S. Canadian General was founded in 1907 and is the eleventh largest of the 240 property/casualty insurers in Canada, with total assets of CAN$1 billion. Gross written premiums written in 1994 exceeded CAN$450 million. The company has 650 employees and operates through 16 offices nationwide. The company offers a broad range of insurance and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. products through independent brokers, including automobile, personal property, commercial property, liability, surety and reinsurance coverage. KKR is an investment firm with offices in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , New York and Menlo Park, California Menlo Park is a city in San Mateo County, California in the United States of America. It is located at latitude 37°29' North, longitude 122°9' East. Menlo Park had 30,785 inhabitants as of the 2000 U.S. Census. . This is KKR's second acquisition in the insurance industry. KKR currently owns about 60% of American Reinsurance, the third largest U.S. reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. , which it acquired in a management-led buyout in 1992. CONTACT: FOR CANADIAN GENERAL: FOR KKR: Jim Hewitt, Ruth Pachman/Josh Pekarsky Canadian General Insurance Group Kekst and Company 416/288-5124 212/593-2655 |
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