OneBeacon To Be Acquired By IFC For $1.7B

May 3, 2017

OneBeacon Insurance Group, Ltd. has entered into a definitive merger agreement under which Intact Financial Corporation [IFC] will acquire all outstanding OneBeacon shares for $18.10 in cash per share.

The $18.10 per share acquisition price is 1.65 times OneBeacon’s book value per share as of March 31, 2017, and represents a 14% premium to the company’s closing stock price on the NYSE of $15.89 as of May 1, 2017 and a 15% premium to the volume weighted average share price over the last 30 days.

This represents aggregate cash consideration of approximately $1.7 billion. In addition, OneBeacon debt of approximately $275 million will remain outstanding.

Mike Miller, CEO of OneBeacon, said, “We are all very excited to join the Intact family. The opportunity to leverage Intact’s deep technical, financial and technology capabilities makes this combination the perfect next step in the OneBeacon journey. Together, we will accelerate our pursuit in creating a leading specialty insurer in North America.

“We look forward to working with our U.S. and Canadian independent agents and brokers to deliver market-leading capabilities to our targeted customers. Both companies are dedicated to ensuring a seamless transition and look forward to profitably growing our specialty portfolio going forward.”

Charles Brindamour, CEO of Intact, said, “Today, we’ve taken an important step in building a world-class P&C insurer. The addition of OneBeacon is creating a leading North American specialty lines insurer focused on small-to-midsize businesses.

“OneBeacon is a strong strategic fit for Intact, with deep expertise in commercial and specialty lines, and shared values. We see significant growth potential from the combination of our specialty lines operations and we look forward to welcoming OneBeacon employees to the Intact family.”

OneBeacon was formed in 2001 when White Mountains Insurance Group, Ltd. acquired the former CGU’s U.S. property-casualty business from Aviva plc. In 2006, White Mountains sold 27.6 million of OneBeacon’s common shares in an initial public offering, or 27.6% of OneBeacon’s common shares at the time of the initial public offering. As of May 2, 2017, White Mountains owned 75.7% of OneBeacon’s common shares, representing 96.9% of the voting power. White Mountains has agreed to vote in favor of the transaction.

The transaction, which was unanimously approved by OneBeacon’s board of directors, is subject to regulatory and shareholder approvals and other customary closing conditions, and is expected to close in the fourth quarter of this year.

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