HCC Acquiring US Surety
NU Online News Service, 2:23 p.m. EDT?HCC Insurance Holdings in Houston announced today that it had reached an agreement to acquire United States Surety Company for an undisclosed amount, payable in HCC shares.[@@]
USSC, founded in 1996, is a surety company based in Timonium, Md., specializing in contract bonding for small and medium-sized contractors in Maryland, Pennsylvania and several other contiguous states.
Following this transaction, USSC is expected to grow its business to more than $25 million in premium over the next few years, HCC said in its announcement today.
An active acquirer, HCC acquired another surety writer?Los Angeles-based American Contractors Indemnity Company?in a deal that closed in February. At the time of the acquisition, HCC said ACIC, a writer of court, specialty contract, license and permit bonds, would likely write about $60 million in gross premiums in 2004.
The latest deal for USSC is subject to signing a definitive agreement and regulatory approval from the State of Maryland.
HCC said that Richard E. Klein, founder and chief executive officer of USSC, will remain with the company following the closing.
In a statement, Mr. Klein said, "We are excited about our new relationship with HCC, who can provide us with the capital, strong financial rating and other resources that we need to continue to grow our business while maintaining our underwriting discipline."
Stephen L. Way, chairman and CEO of HCC, highlighted the potential to expand HCC Group's small and medium-sized surety business to the U.S. East Coast as a benefit of the latest deal.
Looking ahead, HCC predicts that its surety group will write surety premium of more than $100 million in 2005.
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