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White Mountains Re to Acquire Central National
NEW YORK, U.S.A. - 22 January, 2010 - White Mountains Re Ltd., a wholly owned subsidiary of White Mountains Insurance Group, Ltd. (NYSE: WTM) announced today that through a subsidiary it had entered into a definitive agreement to acquire Central National Insurance Company of Omaha from Drum Financial Corporation. In runoff since 1989, Central National has been operated under an order of Rehabilitation in the State of Nebraska since 1990. Among other conditions, the transaction is subject to the termination of the rehabilitation proceedings by the court and the approval of the Nebraska Department of Insurance. Under the terms of the agreement, White Mountains Re will pay approximately $5 million. Central National's statutory surplus as of September 30, 2009 was $13.3 million.
"We are very pleased by the terms of this transaction put together by the White Mountains Re Solutions team", said Allan Waters, President and Chief Executive Officer of White Mountains Re. "Although modest in size, this transaction continues our long history of building shareholder value through acquisitions of runoff insurance and reinsurance companies."
Neal Wasserman, President of White Mountains Re Solutions added, "Despite a competitive market the past few years in the runoff sector, this acquisition demonstrates our ability to successfully complete value-adding acquisitions that meet our return thresholds while at the same time allowing sellers to achieve their goal of extracting trapped capital and obtaining a full and final exit from the insurance business." Central National represents the 6th runoff acquisition by the Solutions team.
White Mountains Re expects the transaction to close during the first quarter of 2010 subject to regulatory approvals and other customary closing conditions.