Validus Holdings buys ADM Crop Risk Services business

31-01-2017

Bermuda-based Validus Holdings has purchased Archer Daniels Midland Company’s (ADM) Crop Risk Services business (CRS).

Under the terms of the transaction, ADM will receive $127.5 million in cash, subject to certain working capital and balance sheet adjustments in exchange for 100 percent of the outstanding stock of CRS.

Validus intends to use cash on hand to fund the transaction. Validus said that it anticipates the closing to take place during the second quarter of 2017, subject to obtaining required regulatory approvals and the satisfaction of other customary closing conditions.

CRS is a primary crop insurance general agent based in Decatur, Illinois with $548.9 million gross premiums written for the 2016 reinsurance year and 1,170 agents across 36 states. Validus stated that it intends to have CRS operate as part of the Western World Insurance Group.

The transaction includes a marketing services agreement under which ADM and Validus will work together to continue to offer a full range of insurance and farm products and services to CRS customers.

Ed Noonan, Validus’ chairman and CEO, said: “I’m very pleased to welcome CRS to Validus. CRS is a high quality crop insurance provider that has achieved excellent growth in recent years. Validus will benefit from CRS’s commitment to provide superior customer service to agents and farmers via their leading technology capabilities.

"The addition of CRS complements Validus’ existing agriculture book and participation in this market is a logical step as Validus continues to expand our presence in U.S. primary specialty lines. We are excited by the long–term partnership with ADM as this transaction further provides the unique opportunity of a marketing services agreement with one of the largest agricultural processors in the world.”

Validus Holdings, Acquisition, Archer Daniels Midland, Crop Risk Services, Ed Noonan, Bermuda

Bermuda Re