Insurance service provider Tawa is to acquire Island Capital for over £4.8 million.
Insurance service provider Tawa has agreed to acquire Island Capital for an initial sum of $7.4 million (£4.8 million).
An additional deferred performance-related payment for the company has been capped at $40 million, but is not expected to exceed $15 million.
The deal is to be financed from Tawa’s existing cash resources and is subject to regulatory approval.
Bermuda-based Island Capital is an insurance company that discontinued its underwriting business in 2008, and is in the process of handling claims relating to policies already sold. At the end of 2009 Island Capital has net assets of $28.1 million. The acquisition includes Island Capital’s wholly owned UK subsidiary, Island Capital (Europe).
London-based Tawa was formed in 2001 to acquire and develop assets and businesses in the insurance industry. The acquisition will give Tawa access to expertise in credit and political risk insurance, according to the company.
Gilles Erulin, CEO of Tawa, comments: ‘One of our goals is to expand our involvement and develop our expertise in specialist and niche areas of the insurance arena. Trade credit insurance is definitely an area where the conjunction of Tawa and Island Capital will provide for further portfolio expansion.
‘This acquisition fits with our strategy of enhancing our long term expansion by combining the existing skills of our people with those of acquired teams and represents an interesting development for Tawa.’