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Featured Company News - Markel Announces State National Cos.' Acquisition; Set to Expand its Specialty Insurance Portfolio

Friday, 28 July 2017 07:50 AM

Pro-Trader Daily

LONDON, UK / ACCESSWIRE / July 28, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Markel Corp. (NYSE: MKL), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=MKL. State National Cos., Inc., (NASDAQ: SNC) (''State National'') announced on July 26, 2017 that, pursuant to a definitive agreement, Markel will acquire all of the outstanding shares of State National's common stock for $21.00 per share in cash, with a total transaction value of about $919 million. State National is the largest and longest-standing pure-play insurance fronting business with about $1.3 million in gross written premium and more than 60 programs, where it is also the leading collateral protection insurance provider in the US. For immediate access to our complimentary reports, including today's coverage, register for free now at: http://protraderdaily.com/register/.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on MKL and SNC. Go directly to your stock of interest and access today's free coverage at:

http://protraderdaily.com/optin/?symbol=MKLhttp://protraderdaily.com/optin/?symbol=SNC

The Announcement

Markel views this announcement as a step to join forces with State Capital, an industry leader with a talented management team that delivers long-term exceptional results. Additionally, State National will assist the Company to leverage Insurtech and digital distribution initiatives, while diversifying the underwriting and fee-based portfolios and revenue streams, and add to Markel's third party capital capabilities. Markel's financial health along with State National's unique business model and proven record of success is set to deliver all stakeholders with a sustainable solution going forward.

The agreement has been approved unanimously by both companies' Board of Directors, representing a 38% premium to State-National's 30-day volume weighted average stock price as of May 18, 2017, the last day prior to published market speculation regarding a potential sale of State National, and a premium of about 7% to the Company's closing price on July 05, 2017. Post the completion of the transaction, State National will operate as a separate business unit. The Company's management team led by Terry Ledbetter, State National's current Chairman and CEO, will remain in his post and continue to be based in Bedford, Texas.

State National is a leading provider of property and casualty insurance services, operating in two niche markets across the United States. The Company operates primarily through its two segments, namely: the Lender Services segment, where it specializes in delivering collateral protection insurance which insures personal automobiles and other vehicles held as collateral for loans made by the credit unions, banks, and specialty finance firms; and the Program Services segment, where it leverages its "A" (Excellent) A.M. Best rating, expansive licenses and reputation to provide access to the US property and casualty insurance market in exchange for a ceding fee.

State National's Board of Directors views this agreement in the best interest of State National and its shareholders. The Company believes that the transaction appropriately recognizes the value of State National's business model, recent growth, and future market opportunities as a leading provider of insurance services, and provides an immediate and attractive premium to shareholders for their investment in State National.

The Costa Farms, Stake Acquisition

Markel and Costa Farms announced a definitive agreement on July 26, 2017, pursuant to which Markel will acquire a majority interest in Costa Farms and its related operating companies. The transaction is subject to customary closing conditions and is expected to close in Q3 2017. Headquartered in Miami, Florida, Costa Farms is the largest producer of ornamental plants in the world. The Company was founded in 1961 by Jose Costa. Costa Farms is a third-generation, family-owned business that stretches over 4,000 acres globally and employs about 5,000 people.

Q2 2017 Results

Markel also reported its Q2 2017 results on July 26, 2017 for the period ended June 30, 2017. According to the Company, comprehensive net income to shareholders was $342.4 million for Q2 2017, versus $606.0 million for the same period in 2016. The Q2 2017 results reflect outstanding performance from the underwriting options, with improved performance across all three of the Company's underwriting segments, as per Markel. The Company completed the acquisition of SureTec during Q2 2017. Additionally, the Company's leadership is satisfied with the contributions of the Markel Ventures operations during the quarter.

Last Close Stock Review

On Thursday, July 27, 2017, the stock closed the trading session at $1032.89, climbing 0.93% from its previous closing price of $1023.34. A total volume of 44.51 thousand shares have exchanged hands, which was higher than the 3-month average volume of 32.59 thousand shares. Markel's stock price rallied 4.94% in the last three months, 10.96% in the past six months, and 9.78% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have surged 14.19%. The stock is trading at a PE ratio of 43.01. At Thursday's closing price, the stock's net capitalization stands at $14.15 billion.

State National's share price finished yesterday's trading session flat at $20.86. A total volume of 1.30 million shares have exchanged hands, which was higher than the 3-month average volume of 329.55 thousand shares. The Company's stock price skyrocketed 40.66% in the last three months, 51.05% in the past six months, and 88.95% in the previous twelve months. Additionally, the stock soared 50.51% since the start of the year. Shares of the Company have a PE ratio of 17.21 and have a dividend yield of 1.15%. The stock currently has a market cap of $871.11 million.

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