Trisura Group to Acquire 100% Interest in Canadian Subsidiary TG Management.
M2 EQUITYBITES-December 7, 2017-Trisura Group to Acquire 100% Interest in Canadian Subsidiary TG Management
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7 December 2017 - Canada-based specialty insurance provider Trisura Group Ltd. (TSX: TSU) has agreed to acquire the remaining 40% management interest in its Canadian subsidiary that holds Trisura Guarantee Insurance Company from current employees and directors of Trisura Guarantee (TG Management Group), the company said.
Trisura has agreed to purchase TG Management Group's interest in Trisura Guarantee in exchange for Trisura common shares, and in the case of certain members of the TG Management Group, preferred shares of Trisura.
The preferred shares will be issued at a price of CDN 25 per share. Holders of the preferred shares are entitled to receive a cumulative quarterly fixed dividend yielding 6.0% annually for an initial five-year period ending December 31, 2022.
Thereafter, the dividend rate will be reset every five years at a rate equal to the five-year government of Canada bond yield plus 7.50%.
The number of common shares to be issued as part of the transaction represents 16.6% of the total number of common shares currently outstanding.
The number of common shares is 963,143, valued at CDN 27,343,629. The number of preferred shares is 64,000 valued at CDN 1,600,000.
Management expects the transaction to be accretive to earnings and book value per share in 2018. Following the transaction, it is expected that Trisura's debt to capital ratio will decline below our target maximum of 20%.
Exchanging Trisura Guarantee management's ownership for shares of Trisura to integrate operations and develop a broader platform.
Trisura Guarantee operates in the surety, risk solutions and corporate insurance segments of the market. Trisura has three principal regulated subsidiaries: Trisura Guarantee Insurance company in Canada, Trisura Specialty Insurance company in the US and Trisura International Insurance Ltd. In Barbados.
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|Publication:||M2 EquityBites (EQB)|
|Date:||Dec 7, 2017|
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