Flash Report: AmTrust Done Deal – Now Private

Following the completion of a take-private deal lead by company executives and private equity firms, trading was suspended in the shares of AmTrust Financial Services (Nasdaq: AFSI).  The family Go-Private transaction is valued at $2.95 billion.

AmTrust is California’s third largest writer of workers’ comp with some $901 million in written premium last year.

The privatization deal was led by Barry Zyskind, chairman and CEO of AmTrust; Stone Point Capital and a new entity – Evergreen Parent L.P. — that includes funding from George and Leah Karfunkel who are part of the Karfunkel-Zyskind Family Trust. Evergreen acquired the 45% of the AmTrust issued and outstanding shares that were not already owned or controlled by the family trust or other affiliates or related parties.

The take-private deal was announced early this year and approved by AmTrust’s stockholders in June.

AmTrust’s primary reinsurer, Maiden Holdings, recently announced a significant third-quarter loss based upon $210 million in adverse reserve development on its AmTrust business. The adverse development was linked to AmTrust’s 2014 to 2017 policy years.

At the same time, Maiden reached a deal with the Enstar Group for a nearly $2.7 billion loss portfolio transfer (LPT) that shifts nearly all of Maiden’s AmTrust losses to Enstar.

Maiden and AmTrust are closely related entities that were both founded by members of the Karfunkel and Zyskind families. Barry Zyskind is the non-executive chairman of Maiden Holdings. AmTrust accounted for roughly 70% of Maiden’s business last year.

AmTrust remains reinsured by Maiden.

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