) completed the takeover of Essentia Insurance Company, a
OneBeacon Insurance Group LLC
). The company had entered into the deal to acquire Essentia
Insurance in October, 2012.
As previously announced, subsequent to the sale of Essentia
Insurance to Markel, OneBeacon has ended its underwriting
arrangement with Hagerty Insurance agency. The decision to end a
five year old partnership with Hagerty came from the failure to
reach any mutually acceptable terms to extend the contract. The
divestiture will provide OneBeacon with a $23 million pretax gain
($15 million after tax) in the first quarter of 2013.
Subsequent to the deal, Essentia Insurance Company which
underwrites insurance solely for Hagerty Insurance Agency and
Hagerty Classic Marine Insurance Agency will continue to do so
throughout the U.S. Hagerty, a privately owned family business is
a much acclaimed classic vehicle insurance provider. It provides
insurance for timeless quality vehicles worldwide like classic
cars, vintage boats, motorcycles and related automotive
Owing to the operations in the niche insurance markets by Hagerty
and Markel, it is expected that the acquisition will bolster the
growth prospect and help to bring about new plans for the clients
of Hagerty. On the other hand the deal is expected to strengthen
and diversify Markel's present Specialty Insurance business by
giving it the opportunity to cater to the biggest network of
classic car owners. The Zacks Consensus Estimate for 2013
is currently pegged at $20.21, representing a year-over-year
increase of nearly 25.83%.
Markel aims to accomplish a smooth transition and ensure
consistency in offering existing customers and agents of Hagerty
with the usual products, services and claim handling which they
are familiar with. There will also be no change in the current
association of Hagerty with its insurance agents.
Markel has undertaken several acquisitions throughout 2012. The
latest on the list was the announcement to buy
Alterra Capital Holdings Limited
) in December, 2012 for $3.13 billion. The deal is expected to
entail Markel with 69% and Alterra with 31% of the merged entity.
The transaction is expected to close in the first half of 2013.
Markel currently holds a Zacks #3 Rank, translating into short
term Hold rating. OneBeacon holds a Zacks #5 Rank translating
into a Strong Sell rating.
ALTERRA CAP HLD (ALTE): Free Stock Analysis
MARKEL CORP (MKL): Free Stock Analysis Report
ONEBEACON INSUR (OB): Free Stock Analysis
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