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Enstar Group's Unit Adds Dana Companies to its Portfolio

Enstar Group Limited 's ESGR unit recently acquired Dana Companies, LLC from Dana Incorporated to enhance the multi line insurer's primary business of managing legacy liabilities. Enstar Holdings (US) Inc. spent $91.5 million for this buyout. The buyout was funded through a drawing under the insurer's revolving credit facility.

Dana Incorporated, a leading supplier of highly engineered drivetrain, sealing, and thermal-management technologies for vehicles, possesses in-depth expertise in personal injury asbestos claims and environmental claims. With Dana Companies on board, the multi line insurer will be able to offer its clients with productive resolution, in relation to the asbestos liabilities, which will arise from past operations. Consequently, the acquisition will add substantial value to the company's inorganic portfolio.

Interestingly, the latest transaction marks the multi line insurer's foray outside the insurance industry. Thus, this bold step signifies the acquirer's capability in providing legacy and capital release solutions to a wider market sector, leading to substantial growth in the insurer's business.

Over the last three months, shares of Enstar Group gained 21.3%, significantly outperforming the Zacks categorized Multi line industry's growth of 15.8%. We expectthe multi line insurer's strategy to invest in prudent initiatives to accelerate growth will drive shares higher.

Acquisitions are a well-accepted strategy for growth among insurers. On Dec 20, 2016, Arthur J. Gallagher & Co. AJG acquired Group Insurance Associates, Inc. for an undisclosed amount. Also, WellCare Health Plans, Inc. (WCG) entered into a definitive agreement to acquire assets like Medicaid membership and certain provider contracts from Tenet Healthcare Corp.'s THC affiliate - Phoenix Health Plan.

This apart, investors interested in other stocks from the insurance industry might consider Alleghany Corporation Y and NMI Holdings, Inc. NMIH . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Alleghany Corporation deals with P&C reinsurance and insurance businesses in the United States and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 20.52%.

NMI Holdings offers private mortgage guaranty insurance services in the United States. The company delivered positive surprises in all of the last four quarters with an average beat of 62.80%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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