The fourth-largest property and casualty insurer globally continues with its merger and acquisition strategy and makes another step into the world’s largest insurance market.
Tokio Marine has agreed to purchase 100 percent of U.S. insurer Pure Group, which caters to wealthy Americans, for about 320 billion Japanese yen ($3.1 billion), the Japanese insurance giant announced in a statement on Thursday.
The White Plains, New York-based Pure Group is among the top high net worth insurance specialists in the U.S., with $1 billion in managed premiums in 2018. It is currently majority-owned by private equity groups KKR and Stone Point.
The deal, valued at 33 times of Pure’s forecast profit for 2020 of $95 million, will be financed using cash on hand and external financing, the statement said. The deal is expected to close in the first quarter next year.
Tokio Marine noted its push into emerging markets and the U.S. «to capture growth opportunities in the global insurance market and to build a further diversified business portfolio.» The deal is the firm’s fourth sizeable acquisition in the U.S., where it has spent $15 billion since 2008, for companies like HCC Insurance in 2015 and Philadelphia Consolidated in 2008.
«The acquisition will contribute to sustainable profit growth and capital efficiency of Tokio Marine Group through Pure Group’s continued high growth potential in the world’s largest P&C insurance market, as well as its stable fee-based business and low capital intensity,» the statement said.