New York-based Tower Group Inc. (TWGP) has completed the acquisition of Illinois-based specialty insurer, Specialty Underwriters’ Alliance Inc. (SUAI). The deal, which was previously announced during Jun 2009, cost $107 million for Tower. All the conditions contingent to the closing of the deal have been met.
The acquisition will enable Specialty Underwriters to better leverage and expand its independent general agent distribution network. The deal will allow Tower to create a separate underwriting and operational infrastructure dedicated to specialty business to take advantage of the growth opportunities in this area. The acquisition also gives Tower a Midwest regional office to support continued geographical expansion. By utilizing Specialty’s underwriting staff to offer products to wholesale and retail agents in the Midwest, Tower would also expand its brokerage insurance business in a region where it did not have an operating presence. By fully leveraging the operating platform and distribution relationships of the acquiring company, Tower will be able to further build on CastlePoint’s specialty business. Tower had completed the acquisition of CastlePoint in Feb 2009 for $531 million.
The deal would appear to put an end to takeover attempts by Texas-based Hallmark Financial Services that the acquiring company had been fighting.
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