Strategy International Insurance Group Inc. said it plans to acquire RS Group of Companies Inc., provider of RentShield, an insurance program covering the residential real estate market, in a deal worth more than $120 million.

The Toronto-based Strategy International said it signed a letter of intent to acquire the outstanding shares of RS Group, also of Toronto. The parties said they have a 60-day exclusivity period to complete the transaction.

Strategy said it anticipates offering $1.75 per share of common stock for RS Group. The price is subject to adjustment based on the completion of a valuation of the company and receipt of a fairness opinion, which could affect the final price.

David Zazoff, a spokesman for RS Group, said there are more than 70 million shares of RS stock outstanding.

At $1.75 a share, the deal would be worth more than $122.5 million.

Shares of RS and Strategy International are traded on the Over The Counter Bulletin Board.

Strategy International, the parent company of Strategy Insurance Ltd., does insurance, reinsurance and structured risk underwriting transactions focusing on credit risk and credit enhancement.

It operates through Strategy Insurance Limited, a Barbados-formed and licensed subsidiary. Strategy International reported it has $158 million in assets as of Jan. 31.

RS Group offers insurance and reinsurance products throughout North America.

The core RS Group product is RentShield, with offices in Miami. The offering provides rental managers a guarantee program to pay rental income in the case of rental default.

It also covers willful damage by a tenant and provides other services for landlords to cover tenants. The company reported operating income of $6.5 million for the year ending 2004 on revenue of more than $16 million. Net income was $305,602.

Mr. Zazoff said the timing of completion of the deal would depend on the fairness opinion report and agreement of terms by the two parties.

Special Reports /

Strategy International To Acquire RS Group

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