Markel to pay $250M for surety bond firm

The Markel Corp. headquarters at Innsbrook. (Michael Schwartz)

The Markel Corp. headquarters at Innsbrook. (Michael Schwartz)

A local Fortune 500 has started off 2017 with a nine-figure acquisition.

Insurance giant Markel Corp. announced late Wednesday it is acquiring Texas-based SureTec Financial Corp., one of the largest privately owned surety companies in the country, for $250 million.

The deal includes a three-year earn out, meaning SureTec could receive more if certain financial goals are met, and is expected to close by July.

SureTec will operate as a separate business unit under Markel’s specialty division and U.S. insurance segment. The unit will be led by SureTec chairman and CEO John Knox Jr. and operate under the name Markel Surety.

In a prepared statement, Markel co-CEO Richard Whitt praised the growth of SureTec’s surety business and profitability since 2002.

“It has become a top-20 player in the surety market nationwide through its offerings of contract, commercial, and court bonds,” Whitt said. “As with all our acquisitions, we look forward to exploring opportunities to profitably grow the business.”

Markel was advised in the deal by TigerRisk Capital Markets & Advisory and Sidley Austin LLP, which served as financial and legal advisors, respectively. SureTec was advised by Locke Lord LLP.

The acquisition is the latest under the Markel umbrella, which includes subsidiary Markel Ventures. In 2015, the subsidiary acquired local IT firm CapTech Ventures, as well as Bermuda-based CATCo Investment Management. That deal was Markel Corp.’s second in Bermuda, where it acquired Alterra Capital Holdings in 2012 in a $3.13 billion deal.

Where Markel Corp.’s principal business markets and underwrites specialty insurance products, Markel Ventures generally targets controlling investments in businesses that operate outside the specialty insurance marketplace.

The Markel Corp. headquarters at Innsbrook. (Michael Schwartz)

The Markel Corp. headquarters at Innsbrook. (Michael Schwartz)

A local Fortune 500 has started off 2017 with a nine-figure acquisition.

Insurance giant Markel Corp. announced late Wednesday it is acquiring Texas-based SureTec Financial Corp., one of the largest privately owned surety companies in the country, for $250 million.

The deal includes a three-year earn out, meaning SureTec could receive more if certain financial goals are met, and is expected to close by July.

SureTec will operate as a separate business unit under Markel’s specialty division and U.S. insurance segment. The unit will be led by SureTec chairman and CEO John Knox Jr. and operate under the name Markel Surety.

In a prepared statement, Markel co-CEO Richard Whitt praised the growth of SureTec’s surety business and profitability since 2002.

“It has become a top-20 player in the surety market nationwide through its offerings of contract, commercial, and court bonds,” Whitt said. “As with all our acquisitions, we look forward to exploring opportunities to profitably grow the business.”

Markel was advised in the deal by TigerRisk Capital Markets & Advisory and Sidley Austin LLP, which served as financial and legal advisors, respectively. SureTec was advised by Locke Lord LLP.

The acquisition is the latest under the Markel umbrella, which includes subsidiary Markel Ventures. In 2015, the subsidiary acquired local IT firm CapTech Ventures, as well as Bermuda-based CATCo Investment Management. That deal was Markel Corp.’s second in Bermuda, where it acquired Alterra Capital Holdings in 2012 in a $3.13 billion deal.

Where Markel Corp.’s principal business markets and underwrites specialty insurance products, Markel Ventures generally targets controlling investments in businesses that operate outside the specialty insurance marketplace.

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