Validus To Acquire ADM’s Crop Risk Services

January 31, 2017

Bermuda-based Validus Holdings have reached an agreement with Archer Daniels Midland Company for the purchase of ADM’s Crop Risk Services business.

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 customers.

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 andSkadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel.

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