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The Hartford Receives Regulatory Nods for Navigators Acquisition
Friday 17 May 2019

17 May 2019 - US-based insurer The Hartford  has received all regulatory approvals necessary for the closing of its acquisition of specialty underwriter The Navigators Group, Inc. (NASDAQ: NAVG), the company said.

The company expects the transaction to be effective on May 23.

Navigators operations, along with The Hartford's current Specialty Commercial and Middle Market businesses, will be aligned around two new market-facing businesses Global Specialty and Middle and Large Commercial.

Last August, the companies announced an agreement under which The Hartford will acquire all outstanding common shares of The Navigators Group for USD 70 a share, or USD 2.1bn in cash.

The Hartford has sufficient existing resources to fund the total purchase price of approximately USD 2.1bn, but will consider alternative sources of capital prior to the closing. The Hartford does not intend to issue common equity in connection with the acquisition.

Hartford said the acquisition expands its product offerings and geographic reach, and adds tenured and proven underwriting and industry talent while strengthening value proposition to agents and customers.
Navigators has 22 locations in the US and eight locations internationally.

The acquisition is subject to regulatory approval and expected to close in late March or April.

Morris "Mo" Tooker, currently head of Middle Market at The Hartford, will lead Middle and Large Commercial, which will include national accounts, and continue to report to Elliot.

This business will focus on delivering workers' compensation, general liability, auto liability and property insurance to mid-size and large businesses through retail agents and brokers.

Included in this organisation are: industry verticals; programme and captive businesses; and umbrella, excess and high-hazard general liability offerings.

Middle and Large Commercial will comprise approximately USD 2.7bn of net written premiums on a pro forma basis.

Vincent C. Tizzio, currently president of Navigators' US Insurance operation, will lead Global Specialty and report to Elliot.

This business will focus on delivering a broad array of specialty products through retail and wholesale channels, and will include US specialty insurance and international teams.

The surety and financial products businesses of The Hartford will become a part of Global Specialty.

Global Specialty will represent approximately USD 1.9bn in net written premiums on a pro forma basis.

M. Ross Fisher, currently head of Specialty Commercial at The Hartford, will take on the new role of property and casualty global chief underwriting officer and continue to report to Elliot. H. Clay Bassett, Jr., will continue to lead Navigators Reinsurance in the new organization and report to Fisher.

Stanley A. Galanski, who has served as Navigators' CEO since 2003, will continue to serve as president and CEO through the completion of the acquisition.

Upon closing of the transaction, he will assume an executive advisory role during a transition period. Under Galanski's leadership, Navigators grew to become a global specialty insurer with strong positions in the global marine, specialty casualty, and management and professional liability markets.

The company has approximately 820 employees globally who will join The Hartford upon closing.

Navigators is recognised as a market leader in the global marine, construction and energy industries, as well as in US excess casualty and surplus lines.

The Hartford is in property and casualty insurance, group benefits and mutual funds.

Citigroup Global Markets Inc. acted as lead financial advisor to The Hartford, with Deutsche Bank Securities Inc. also providing financial advice. Mayer Brown provided legal counsel to The Hartford.
Details
Date Published: 17/05/2019
Target: The Navigators Group
Country: USA
Deal Size: 2.1bn (USD)
Sector: Insurance
Type: Corporate acquisition
Financing: Cash
Status: Agreed
Vendor:
Buyer: The Hartford,  
Buyer Advisor: Citigroup Global Markets , Deutsche Bank Securities , Mayer Brown
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