TORONTO, Sept. 9 /CNW/ - (TSX: KFS, NYSE: KFS) Kingsway Financial
Services Inc. ("Kingsway" or "Company") today announced that it has entered
into a definitive agreement to sell Zephyr Insurance Company, Inc. ("Zephyr")
to Zephyr Acquisition Company ("ZAC"), an acquisition vehicle of Ocean Harbor
Holding Inc. and MP Holdings LLC, a Hawaiian based investor group. The
transaction is expected to be completed during the fourth quarter of 2009
subject to the receipt of regulatory approvals.
Zephyr is a specialty property insurance company founded specifically to
protect Hawaii homeowners and residents from catastrophic loss due to
hurricanes. For the first six months of 2009, Zephyr had gross premiums
written of approximately US$36 million, or 7% of the premiums of the Kingsway
group of companies, and produced an underwriting profit.
Kingsway anticipates receiving initial gross proceeds from the
transaction of $31.5 million U.S., plus a contingent, deferred earn-out
Piper Jaffray & Co. is acting as the exclusive financial advisor and
Cassels Brock & Blackwell LLP is acting as legal counsel to Kingsway.
de Jonge LLC and FL Advisors, LLC are acting as the financial advisors
and Joseph Jacobs, George Matlock and Sullivan & Worchester LLP are acting as
legal counsel to ZAC.
About the Company
Kingsway focuses on non-standard automobile insurance in North America.
Kingsway's primary businesses are the insuring of automobile risks for drivers
who do not meet the criteria for coverage by standard automobile insurers, and
commercial automobile insurance. The Company operates through wholly-owned
insurance subsidiaries in Canada and the U.S. which it is currently
consolidating to reduce overhead and strengthen its competitive position. The
Company also operates reinsurance subsidiaries in Barbados and Bermuda. The
common shares of Kingsway Financial Services Inc. are listed on the Toronto
Stock Exchange and the New York Stock Exchange, under the trading symbol
This press release includes forward-looking statements that are subject
to risks and uncertainties. These statements related to future events or
future performance and reflect management's current expectations and
assumptions. The words "anticipate", "expect", "believe", "may", "should",
"estimate", "project", "intend", "forecast" or similar words are used to
identify such forward-looking information. Such forward-looking statements
reflect management's current beliefs and are based on information currently
available to management of Kingsway. A number of factors could cause actual
events, performance or results to differ materially from the events,
performance and results discussed in the forward-looking statements. For
information identifying important factors that could cause actual results to
differ materially from those anticipated in the forward-looking statements,
see Kingsway's securities filings, including its 2008 Annual Report under the
heading Risk Factors in the Management's Discussion and Analysis section. The
securities filings can be accessed on the Canadian Securities Administrators'
website at www.sedar.com, and on the EDGAR section of the U.S. Securities and
Exchange Commission's website at www.sec.gov or Kingsway's website at
www.kingsway-financial.com. Kingsway disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
%SEDAR: 00003152E %CIK: 0001072627
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