Cut-through endorsement to provide 'A-' rated paper through closing
CHICAGO, Sept. 21, 2005 SIRVA, Inc. (NYSE: SIR), a global relocation services provider, has announced a definitive agreement to sell the stock of Transguard Insurance Company of America, Inc., National Association of Independent Truckers, L.L.C. (NAIT), Vanguard Insurance Agency, Inc., and other related companies of its insurance services group to IAT Reinsurance Company Ltd. in a cash deal currently estimated at approximately $100 million.
An affiliate of IAT will provide a cut-through endorsement to provide TransGuard's customers with "A-" rated paper through closing of the transaction.
This transaction finalizes SIRVA's strategic review of its Insurance business and marks its exit from U.S. Insurance operations.
The transaction, which is expected to close by the end of the year, is subject to customary closing conditions and the receipt of various regulatory approvals, including state insurance commission approval and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
According to an IAT Re executive, "The TransGuard Companies have a long history of providing excellent products and services to the moving and storage transportation industry and independent owner operator market. The acquisition of this highly specialized company complements our other transportation related businesses. We look forward to contributing to the continued success of TransGuard in the marketplace and welcoming its very talented employees to the IAT Re family."
Harco National Insurance Company, a subsidiary of IAT Re, will provide a cut-through endorsement, which will replace the Hannover 100 percent quota share announced in June and will provide "A-" rated coverage to current customers and the TransGuard broker network.
About SIRVA, Inc.
SIRVA, Inc. is a leader in providing relocation solutions to a well- established and diverse customer base around the world. The company is the leading global provider that can handle all aspects of relocations end-to-end within its own network, including home purchase and home sale services, household goods moving, mortgage services and insurance. SIRVA conducts more than 365,000 relocations per year, transferring corporate and government employees and moving individual consumers. The company operates in more than 40 countries with approximately 6,000 employees and an extensive network of agents and other service providers. SIRVA's well-recognized brands include Allied, northAmerican, Global, and SIRVA Relocation in North America; Pickfords, Huet International, Kungsholms, ADAM, Majortrans, Allied Arthur Pierre, Rettenmayer, and Allied Varekamp in Europe; and Allied Pickfords in the Asia Pacific region.
About IAT Reinsurance Company Ltd.
IAT Re, a privately held Bermuda domiciled reinsurer, with corporate offices in Raleigh, NC was founded in 1986, and at June 30, 2005 had capital and surplus of approximately $900 million. IAT Re writes property and casualty reinsurance and is a direct writer of property and casualty insurance in the U.S. through its wholly-owned subsidiaries Harco National Insurance Company, Occidental Fire & Casualty Company of North Carolina, Wilshire Insurance Company, Acceptance Indemnity Insurance Company and Acceptance Casualty Insurance Company. IAT Re and all of its insurance subsidiaries are rated A- (Excellent) by A.M. Best Company.
The ultimate sale price will be based on book value at closing plus a premium of up to approximately $20 million paid over six years. Upfront cash proceeds net of transaction expenses and ongoing collateral requirements are expected to be $65 - $70 million.