Jan 30, 2017
Validus Holdings Announces Agreement with Archer Daniels Midland to Acquire ADM Crop Risk Services Business
PEMBROKE, Bermuda--(BUSINESS WIRE)--Jan. 30, 2017--
Validus Holdings, Ltd. (“Validus” or the “Company”) (NYSE:VR) announced
today that they have reached an agreement with Archer Daniels Midland
Company (“ADM”) (NYSE:ADM) for the purchase of ADM’s Crop Risk Services
business (“CRS”). The transaction includes a marketing services
agreement under which ADM and Validus will work together to continue to
offer a full range of insurance and farm products and services to CRS
CRS is a primary crop insurance general agent based in Decatur, Illinois
with $548.9 million gross premiums written for the 2016 reinsurance year
and 1,170 agents across 36 states. Validus intends to have CRS operate
as part of the Western World Insurance Group.
Ed Noonan, Validus’ Chairman and Chief Executive Officer, stated, “I’m
very pleased to welcome CRS to Validus. CRS is a high quality crop
insurance provider that has achieved excellent growth in recent years.
Validus will benefit from CRS’s commitment to provide superior customer
service to agents and farmers via their leading technology capabilities.
The addition of CRS complements Validus’ existing agriculture book and
participation in this market is a logical step as Validus continues to
expand our presence in U.S. primary specialty lines. We are excited by
the long–term partnership with ADM as this transaction further provides
the unique opportunity of a marketing services agreement with one of the
largest agricultural processors in the world.”
Joe Taets, President of ADM’s Agricultural Services Business Unit,
stated, “We’re pleased to have reached an agreement that includes a
marketing services agreement that will allow ADM and Validus to work
together to continue to offer customers a full array of crop insurance
products as well as ADM’s grain marketing services. We are pleased to
have found a buyer in Validus that is committed to running—and
growing—the business, and we look forward to continuing to work with
Validus and the CRS sales team and their customers across the country.”
Under the terms of the transaction, ADM will receive $127.5 million in
cash, subject to certain working capital and balance sheet adjustments
in exchange for 100% of the outstanding stock of CRS. Validus intends to
use cash on hand to fund the transaction. Validus anticipates the
closing to take place during the second quarter of 2017 and is subject
to obtaining required regulatory approvals and the satisfaction of other
customary closing conditions.
Goldman, Sachs & Co. is acting as financial advisor to Validus and
Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel.
An investor presentation detailing the transaction is available on
Validus’ website at www.validusholdings.com.
About Validus Holdings, Ltd.
Validus Holdings, Ltd. (“Validus”) is a holding company for reinsurance
and insurance operating companies and investment advisors including
Validus Reinsurance, Ltd. (“Validus Re”), Talbot Holdings Ltd.
(“Talbot”), Western World Insurance Group, Inc. (“Western World”) and
AlphaCat Managers, Ltd. (“AlphaCat”). Validus Re is a Bermuda based
reinsurer focused on short tail lines of reinsurance. Talbot is the
Bermuda parent of the specialty insurance group primarily operating
within the Lloyd's insurance market through Syndicate 1183. Western
World is a U.S. specialty lines insurance company focused on excess and
surplus lines. AlphaCat is a Bermuda based investment adviser managing
capital for third parties and Validus in insurance linked securities and
other property catastrophe reinsurance investments.
About ADM Crop Risk Services
ADM Crop Risk Services (“CRS”) is a primary crop insurance general agent
based in Decatur, Illinois. CRS was established in 1982 as ASI AgriServe
Inc. In 2010, ADM acquired 100 percent of the shares of ASI, and the
company became ADM Crop Risk Services.
CRS aims to provide farmers with affordable crop income protection,
superior service and utmost integrity.
Cautionary Note Regarding Forward-Looking
This press release may include forward-looking statements, both with
respect to the Company and its industry, that reflect our current views
with respect to future events and financial performance. Statements that
include the words "expect", "intend", "plan", "believe", "project",
"anticipate", "will", "may" and similar statements of a future or
forward-looking nature identify forward-looking statements. All
forward-looking statements address matters that involve risks and
uncertainties, many of which are beyond the Company's control.
Accordingly, there are or will be important factors that could cause
actual results to differ materially from those indicated in such
statements and, therefore, you should not place undue reliance on any
such statements. We believe that these factors include, but are not
limited to, the following: 1) unpredictability and severity of
catastrophic events; 2) rating agency actions; 3) adequacy of Validus'
risk management and loss limitation methods; 4) cyclicality of demand
and pricing in the insurance and reinsurance markets; 5) statutory or
regulatory developments including tax policy, reinsurance and other
regulatory matters; 6) Validus' ability to implement its business
strategy during "soft" as well as "hard" markets; 7) adequacy of
Validus' loss reserves; 8) continued availability of capital and
financing; 9) retention of key personnel; 10) competition; 11) potential
loss of business from one or more major insurance or reinsurance
brokers; 12) Validus' ability to implement, successfully and on a timely
basis, complex infrastructure, distribution capabilities, systems,
procedures and internal controls, and to develop accurate actuarial data
to support the business and regulatory and reporting requirements; 13)
general economic and market conditions (including inflation, volatility
in the credit and capital markets, interest rates and foreign currency
exchange rates); 14) the integration of businesses Validus may acquire
or new business ventures Validus may start; 15) the effect on Validus'
investment portfolios of changing financial market conditions including
inflation, interest rates, liquidity and other factors; 16) acts of
terrorism or outbreak of war; and 17) availability of reinsurance and
retrocessional coverage, as well as management's response to any of the
The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with the other cautionary
statements that are included herein and elsewhere, including the risk
factors included in Validus' most recent reports on Form 10-K and Form
10-Q and other documents of the Company on file with or furnished to the
U.S. Securities and Exchange Commission (“SEC”). Any forward-looking
statements made in this press release are qualified by these cautionary
statements, and there can be no assurance that the actual results or
developments anticipated by Validus will be realized or, even if
substantially realized, that they will have the expected consequences
to, or effects on, Validus or its business or operations. Except as
required by law, the Company undertakes no obligation to update publicly
or revise any forward-looking statement, whether as a result of new
information, future developments or otherwise.
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Source: Validus Holdings, Ltd.
Validus Holdings, Ltd.
Charlotte Connerton / Mustafa Riffat