Hilltop Holdings Inc. HTH has divested its wholly-owned subsidiary, National Lloyds Corporation, to Align Financial Holdings, LLC. The all-cash deal was announced this January.
Subject to post-closing adjustments, gross proceeds from the transaction were $154.1 million.
With active licenses in 40 states, National Lloyds is a specialty property underwriter that caters to the needs of owners of lower-value homes and mobile homes. It writes premiums through two subsidiaries, National Lloyds Insurance Company and American Summit Insurance Company (which are collectively called “Carriers”). Also, it has wholly-owned agency and services businesses, including Nalico General Agency (the “Agencies”).
Notably, per the terms of the deal, concurrent with the buyout of National Lloyds, Align Financial sold the Carriers to ReAlign Insurance Holdings, LLC, in an all-cash transaction.
Also, as previously decided, the Agencies retained by Align have entered various agreements with the Carriers to provide services, including acting as a program underwriting manager and claims administrator for the Carriers.
Jeremy B. Ford, president and CEO of Hilltop Holdings, stated, “We are so proud of what National Lloyds has accomplished during the past 13 years as a part of the Hilltop family. I believe that Align’s established platform and keen focus on the insurance industry will help take National Lloyds to the next level.”
Align’s CEO, Kieran Sweeney, said, “This strategic transaction will serve to further diversify and scale Align’s business; putting us on track to write close to $500 million of specialty premiums this year. We look forward to working together to deliver new and enhanced product solutions to their valued customers.”
Supported by a continued rise in loans, Hilltop Holdings remains well-poised for organic growth. In fact, the company has been growing inorganically as well. Since 2012, its business has expanded tremendously as it consolidated its position in Texas, Oklahoma, Georgia, Tennessee and Arizona. In addition to being earnings accretive, its inorganic growth efforts have helped in diversifying operations from core P&C insurance to a profitable banking operation.
Over the past three months, shares of the company have gained 31.9% compared with the 24.7% rally of the industry.
Currently, Hilltop Holdings carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, there has been a rise in restructuring activities in the finance sector of late. Last month, Wells Fargo Investment Institute, Inc., the registered investment advisor and wholly-owned subsidiary of Wells Fargo WFC, announced a deal to sell the Global Alternative Investments Feeder Fund Platform to iCapital Network to simplify operations and provide innovative products to the bank’s clients.
Affiliated Managers AMG announced that it will be a minority equity partner to the recently founded San Francisco-based independent investment firm, Inclusive Capital Partners. Meanwhile, Charles Schwab SCHW acquired Motif’s technology and intellectual property assets, with an aim of bolstering existing capabilities along with speeding up the development of thematic and direct indexing solutions for its retail investors as well as RIA clients.
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