Amtrust Financial Services Inc 7.50% Dep Shs Rep 1/40th Pfd Ser D Usd25 · OTC:AFFS
Amtrust Financial Services Inc 7.50% Dep Shs Rep 1/40th Pfd Ser D Usd25 — AmTrust Financial Services — Proxy Contest (May 2018)
30 slides from Amtrust Financial Services Inc 7.50% Dep Shs Rep 1/40th Pfd Ser D Usd25's proxy contest presentation, May 22, 2018
Slide 1: Investor Presentation: AmTrust Financial Services, Inc.
May 2018 CONSISTENT VISION DIFFERENTIATED MODEL SUSTAINABLE GROWTH Investor Presentation: AmTrust Financial Services, Inc.
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains certain forward-looking statements that are intended to be covered by the safe harbors created by the Private Securities Litigation Reform Act of 1995. When we use words such as "anticipate," "intend," "plan," "believe," "estimate," "expect," or simil
Slide 3: Agenda
Agenda AmTrust Overview Evergreen Transaction Result of Robust Process Removes Significant Business Risks and Uncertainties Summary
Slide 4: AmTrust Financial Overview
Global provider of insurance and risk solutions Founded in 1998 with IPO in 2006 Grew from $10M in gross written premiums in 1998 to $8.4B in 2017 7,000+ global employees in 70 countries Leading market positions Top three provider of workers’ compensation insurance Top three warranty underwriter in
Slide 5: AmTrust Financial Overview (cont'd)
DIFFERENTIATED MODEL Innovative technology allows AmTrust to be highly responsive and adaptive Multi-line, multi-region product portfolio SUSTAINABLE GROWTH Growing Financial Capacity Thoughtful Capital Management CONSISTENT VISION Dedicated to small business Target lower hazard risk industry classe
Slide 6: Agenda
Agenda AmTrust Overview Evergreen Transaction Result of Robust Process Removes Significant Business Risks and Uncertainties Summary
Slide 7: Thorough Process led by Experienced and Independent Special Committee
Susan Fisch Independent Director 30+ years of experience as a reinsurance broker specializing in workers’ compensation Created the Workers’ Compensation Practice Group at Willis Re Previous experience at reinsurance and risk intermediaries Benfield Blanch and Enan & Company, actuarial company Towers
Slide 8: Going Private Delivers Highest Value for AmTrust Stockholders
Going Private Delivers Highest Value for AmTrust Stockholders All cash offer provides unaffiliated stockholders immediate liquidity at a significant, certain premium to AmTrust’s unaffected closing stock price on January 9, 2018(1) Robust, independent diligence process by Special Committee, formed b
Slide 9: Transaction Highlights
Transaction Highlights Stone Point Capital, the Karfunkel Family and the CEO to Acquire AmTrust Financial Services, Inc. (“AmTrust” or the “Company”) AmTrust has entered into a definitive agreement with Evergreen Parent, L.P. (“Evergreen Parent”), an entity formed by private equity funds managed by
Slide 10: Process Overview
Process Overview Note: Please refer to our definitive proxy materials on Form DEF-14A as filed with the SEC on May 4, 2018 The $13.50 per share merger consideration and other terms and conditions of the Merger Agreement resulted from extensive negotiations between the Special Committee and its advis
Slide 11: Key Special Committee Activities and Events
Key Special Committee Activities and Events November 16 – November 17 Mr. Zyskind advised the Board of Stone Point’s interest in a potential transaction at a meeting of the Board on November 16, 2017 At the meeting, the Board determined to permit Stone Point to conduct due diligence in connection wi
Slide 12: Key Special Committee Activities and Events
Key Special Committee Activities and Events January 2 Special Committee interviews several law firms including Willkie, Farr & Gallagher and after discussion retains Willkie January 4 Special Committee interviews several potential financial advisors to the Special Committee, including Deutsche Bank
Slide 13: Key Special Committee Activities and Events (cont'd)
Key Special Committee Activities and Events (cont’d) Source: Definitive proxy statement filed with the SEC by AmTrust on May 4, 2018 January 19 Special Committee appoints Deutsche Bank as financial advisor January 19 – February 27 Due diligence, including: review of virtual data room several discuss
Slide 14: Full Range of Strategic Alternatives Considered
Full Range of Strategic Alternatives Considered Scenario Description Potential benefits Considerations Status Quo Continue to execute on the current business plan Minority stake continues to be owned by public stockholders Advantages of being public including access to equity capital markets and pub
Slide 15: Price Negotiations to Obtain Best Offer
Price Negotiations to Obtain Best Offer Premium to unaffected price ($10.15) 20.7% 27.1% 28.1% 33.0% Total # of price increases: 3 Total increase from initial offer: 10.2% (1) Stone Point agrees to initial offer only with reserve adjustment that indemnifies Stone Point for an adverse reserve develop
Slide 16: Valuation Framework
Valuation Framework Overview of valuation methodologies considered Valuation levers Description / Comments Trading valuation Public trading multiples Analysis of trading multiples for AmTrust and peers(a) relative to AmTrust Price / Earnings, Price / Book Value, Price / Tangible Book Value are consi
Slide 17: Dividend Discount Analysis
Dividend Discount Analysis Source: Merger proxy filed 5/4/2018. Note: Analysis includes the present value of the Company’s remaining 49% ownership interest in its U.S. fee businesses (based on the estimate of the carrying value) and the present value of a contingent litigation asset (estimated $15mm
Slide 18: Precedent Insurance Transactions
Precedent Insurance Transactions Note: Transactions over $200mm in deal value have been considered. Workers’ comp focused companies have 50% or more GPW or NPW from workers’ comp LoB. P/E multiple based on 2018E net income in the Special Committee case. Multiples calculated based on BV and TBV as of
Slide 19: Precedent Squeeze-Outs: Insurance companies
Precedent Squeeze-Outs Insurance companies Note: Includes domestic insurance transactions since 2000 over $200mm in deal value. Source:Company filings, Thomson Reuters, Factset, SNL Financial, press articles
Slide 20: Precedent Squeeze-Outs: Non-insurance companies
Precedent Squeeze-Outs Non-insurance companies Note: Includes domestic transactions since 2000 over $200mm in deal value. Source:Company filings, Thomson Reuters, Factset, SNL Financial, press articles
Slide 21: Agenda
Agenda AmTrust Overview Evergreen Transaction Result of Robust Process Removes Significant Business Risks and Uncertainties Summary
Slide 22: Provides Unaffiliated Stockholders with Certain Value and Removes Risk
Provides Unaffiliated Stockholders with Certain Value and Removes Risk In addition to providing immediate liquidity at a significant premium, the transaction provides certain value to unaffiliated stockholders and shifts the business risk and uncertainties faced by the Company to the buyer group, in
Slide 23: AmTrust Trading Performance (Jan/17 – Jan/18)
AmTrust Trading Performance (Jan/17 – Jan/18) 11/6/2017 AM Best places credit rating under review; Sale of FeeCo in $1.1bn LBO with MDP 5/25/2017 Announced $300mm private placement with members of the Family 6/9/2017 Sale of $200mm stake in National General 3/16/2017 Extended deadline to file 2016 1
Slide 24: AmTrust Sell-Side Analyst Perspectives
AmTrust Sell-Side Analyst Perspectives “Good time to be private…AFSI has been in the process of effectively recapitalizing itself in light of ongoing reserve charges…this has happened in the context of the company seeking to remedy control weaknesses... AFSI has a significant global franchise that h
Slide 25: AmTrust Sell-Side Analyst Perspectives (cont'd)
AmTrust Sell-Side Analyst Perspectives (cont’d) “We are Neutral on AFSI with a price target near tangible book value. We have reservations around AFSI reserve deficiency following their 2017 pretax adverse charge of ~$420M and based on our recent reserve analysis. AFSI has a significant global franc
Slide 26: Stone Point a Strong Private Equity Partner
Stone Point a Strong Private Equity Partner Stone Point Capital is a financial services-focused private equity firm based in Greenwich, CT. Firm has raised and managed seven private equity funds – the Trident Funds – with aggregate committed capital of approximately $19 billion. Stone Point is well
Slide 27: Agenda
Agenda AmTrust Overview Evergreen Transaction Result of Robust Process Removes Significant Business Risks and Uncertainties Summary
Slide 28: Summary
Summary Transaction delivers highest value for stockholders Vote FOR the Merger Agreement All cash offer that provides significant and certain premium and immediate liquidity Comprehensive range of alternatives evaluated Robust, independent diligence process by Special Committee, formed by independe
Slide 29: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the proposed transaction, AmTrust Financial Services, Inc. (the “Company”) has filed with the Securities and Exchange Commission (the “SEC”) a proxy statement on Schedule 14A and may file other documents with the SEC regarding the propos
Slide 30: Investor Presentation: AmTrust Financial Services, Inc.
May 2018 CONSISTENT VISION DIFFERENTIATED MODEL SUSTAINABLE GROWTH Investor Presentation: AmTrust Financial Services, Inc.
AmTrust Financial Services — Proxy Contest (May 2018) on 6ix