AmTrust Financial Services Inc (NASDAQ: AFSI) is having a great day in the market today, and for good reason. The company announced that it has entered into a definitive agreement, under which, the company will go private. Of course, this led to excitement among investors, sending the stock on a run for the top. Today, we’ll talk about the news, what we’re seeing from the stock, and what we’ll be watching for with regard to AFSI ahead.
AFSI Announces That It Will Be Going Private
As mentioned above, AmTrust Financial Services is having an incredibly strong day in the market today after announcing that it has entered into a definitive agreement to go private. In a press release issued early this morning, the company announced that it entered into the agreement with Evergreen Parent, L.P., an entity formed by private equity funds managed by Stone Point Capital LLC as well as Barry D. Zyskind, Chairman and CEO at AFSI, George Karfunkel and Leah Karfunkel. Under the terms of the agreement, Evergreen will acquire 45% of the company’s issued and outstanding common shares. This is the remainder of shares not owned by the Karfunkel-Zyskind Family already. The deal is valued at approximately 2.7 billion. In a statement, Mr. Zyskind, Chairman and CEO at AFSI, had the following to offer:
I believe that this transaction represents an exciting step forward for AmTrust, our employees, and the agents, brokers, partners, and customers we serve. As a private enterprise, we will be able to focus on long-term decisions without the emphasis on short-term results.
The year 2018 marks the 20th anniversary of AmTrust’s founding. Alongside Stone Point Capital, a strong partner widely recognized as an experienced investor in the insurance sector, the Karfunkel-Zyskind family is deeply committed to the long-term strength and success of AmTrust. We are well-positioned to continue meeting our policyholders’ needs, supporting our bookers and agents, and developing our partner relationships.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news proved to be overwhelmingly positive. So, it’s no surprise to see that AmTrust is headed for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:10), AFSI is trading at $12.97 per share after a gain of $1.00 per share or 8.33% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AFSI. In particular, we’ll be watching for further news surrounding the going private transaction. After all, it is still subject to regulatory approval and other closing conditions. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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