Summary
Arch Capital Group Ltd. (ACGL) announced the completion of its acquisition of United Guaranty Corporation (UG Corp) through its wholly-owned subsidiary, Arch U.S. MI Holdings, Inc. The transaction, valued at approximately $3.26 billion, was comprised of $2.16 billion in cash and $1.1 billion in ACGL's convertible preferred shares. This strategic acquisition significantly expands ACGL's footprint in the mortgage insurance sector. The completion of the UG Corp acquisition is subject to certain conditions, including maintaining minimum capital levels for ACGL's GSE-approved subsidiaries: Arch Mortgage Insurance Company, United Guaranty Residential Insurance Company, and United Guaranty Mortgage Indemnity Company. The sale of UG Asia, a related entity, is anticipated to close in 2017 pending further regulatory approval. Investors should note that detailed historical and pro forma financial statements for UG Corp have been incorporated by reference.
Key Highlights
- 1ACGL completed the acquisition of United Guaranty Corporation (UG Corp) on December 31, 2016, for approximately $3.26 billion.
- 2The purchase price consisted of $2.16 billion in cash and $1.1 billion in convertible preferred shares.
- 3The acquisition was made through ACGL's wholly-owned subsidiary, Arch U.S. MI Holdings, Inc.
- 4The transaction is subject to conditions related to maintaining minimum capital levels for ACGL's GSE-approved subsidiaries.
- 5The sale of UG Asia is expected to close in 2017, pending regulatory approval.
- 6ACGL released a press announcement on January 3, 2017, regarding the closing of the acquisition.
- 7Historical and pro forma financial statements of UG Corp have been incorporated by reference for detailed review.