HCC Insurance Holdings to acquire the Centris Group for 1.54 times revenue

Weekly Corporate Growth Report, Oct 18, 1999

The Deal: HCC Insurance Holdings Inc. has agreed to acquire The Centris Group Inc. for $171 million and the assumption of $25 million in debt. HCC has completed 15 acquisitions for a total value of $500 million since its 1992 initial public offering. The company expects to take a restructuring/reorganization charge of $5 million by the end of 1999. HCC has agreed to pay $12.50 per share for each Centris share.

Discussion: Centris is a specialty insurance company. It provides medical stop loss insurance coverage for hospitals and doctors who offer fixed fee services to their patients. It also provides excess and surplus lines insurance. The company operates primarily through US Benefits Insurance Services Inc., its insurance underwriting agency subsidiary. Its other insurance companies include Centris Life Insurance Company, Centris Insurance Company, and USF Insurance Company.

HCC is an international insurance holding company. It operates its own medical stop loss insurance business through its insurance underwriting agency subsidiary, HCC Benefits Corp. and one of its insurance company subsidiaries, Avemco Insurance Company.

Both stop loss underwriting operations are of similar size and structure. The combination of the two insurance underwriting agency operations will create an industry leading provider of medical stop loss insurance. The new company is expected to have $350 million of written premiums in 2000.