By Lisa Kerner
Charlotte, N.C., June 30 - Allied World Assurance Co. Holdings, Ltd. agreed to acquire Darwin Professional Underwriters, Inc. for $32 per share, or approximately $550 million in cash.
Both companies' boards of directors approved the plan, an Allied World news release said.
A $16.5 million termination fee is included in the agreement, it was reported in a form 8-K filed with the Securities and Exchange Commission.
Allied World said the per-share offer price is subject to a downward adjustment in the event that certain capitalization representations by Darwin are breached and, as a result of such breach, the total consideration payable by Allied World in the merger is increased by more than $1 million.
According to Allied World, a subsidiary of Alleghany Corp. agreed to vote 40% of the outstanding Darwin shares in favor of the transaction, which is slated to close in the fourth quarter of 2008.
"Acquiring Darwin is expected to immediately enhance both companies' market profile and accelerate Allied World's expansion of its U.S. specialty insurance operations," Allied World president and chief executive officer Scott Carmilani stated in the release.
"This acquisition will more than double Allied World's presence in the U.S., particularly within the U.S. health-care market," Carmilani added.
Darwin president and CEO Stephen J. Sills will retire following the merger's close.
Jack Sennott, currently chief financial officer of Darwin, will become the company's chief operating officer.
Allied World provides insurance and reinsurance solutions offices in Bermuda, the United States and Europe. The company is based in Pembroke, Bermuda.
Darwin is a Farmington, Conn., specialty insurance group.
| Acquirer: | Allied World Assurance Co. Holdings, Ltd.
|
| Target: | Darwin Professional Underwriters, Inc.
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| Announcement date: | June 30
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| Transaction total: | $550 million
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| Price per share: | $32.00
|
| Termination fee: | $16.5 million
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| Expected closing: | Fourth quarter of 2008
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| Stock price of target: | NYSE: DR: $30.20 on June 27
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