Navigators Group Inc., a Stamford-based firm that provides insurance services to marine, construction and energy industries, has entered into a definitive agreement to be acquired by The Hartford Financial Services Group in an all-cash transaction for $2.1 billion.
Navigators stockholders will receive $70 per share in cash upon the closing of the transaction. The per-share offer price represents a multiple of 1.78 times Navigators’ fully diluted tangible book value per share as of June 30 and an 18.6 percent premium to the 90-trading-day average stock price.
“We look forward to bringing Navigators’ specialty lines capabilities to The Hartford, an organization that shares our commitment to underwriting excellence, attracting and retaining top talent and delivering exceptional customer experiences,” said Navigators President and CEO Stanley Galanski. “Joining The Hartford and leveraging the strength of its balance sheet and quality of its core commercial insurance products, we will create exciting opportunities to deliver enhanced value to our brokers and policyholders.”
The Hartford Chairman and CEO Christopher Swift said the acquisition “expands our product offerings and geographic reach and adds tenured and proven underwriting and industry talent while strengthening our value proposition to agents and customers. We are optimistic about our combined growth opportunities and expect the acquisition to generate attractive returns.”
The transaction, which was unanimously approved by Navigators’ board of directors, is subject to regulatory and stockholder approvals and other customary closing conditions and is expected to close in the first half of 2019. Navigators expects to continue paying regular quarterly dividends consistent with past practice prior to closing. Completion of the transaction is not subject to any financing conditions.
Navigators’ founder and shares controlled by other members of his family, which represent approximately 20 percent of total shares outstanding, have agreed to vote in support of Navigators’ transaction with The Hartford.
The agreement includes a “go-shop” provision designed to afford an opportunity for other potential acquirers to determine whether they are interested in proposing to acquire Navigators. As a result, Navigators will have an opportunity for 30 days to solicit competing acquisition proposals. If its board accepts a competing proposal during the “go-shop” period that The Hartford does not match, the successful competing bidder would pay a termination fee to The Hartford.