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)
35 slides from Amtrust Financial Services Inc 7.50% Dep Shs Rep 1/40th Pfd Ser D Usd25's proxy contest presentation, May 2018
Slide 1: Investor Presentation: AmTrust Financial Services, Inc.
November May 2018 16, 2016 2016 Presentation: Investor Investor AmTrust Financial Services, Conference Inc. CONSISTENT VISION DIFFERENTIATED MODEL SUSTAINABLE GROWTH
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 AmTrust Corrects Icahn’s Inaccuracies Summary 3
Slide 4: AmTrust Financial Overview
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
Slide 5: AmTrust Financial Overview (cont'd)
AmTrust Financial Overview (cont’d) AmTrust is a global provider of insurance and risk solutions, focused on niche opportunities and operational excellence CONSISTENT DIFFERENTIATED SUSTAINABLE VISION MODEL GROWTH Dedicated to small Innovative technology Growing Financial business allows AmTrust to
Slide 6: Agenda
Agenda AmTrust Overview Evergreen Transaction Result of Robust Process Removes Significant Business Risks and Uncertainties AmTrust Corrects Icahn’s Inaccuracies Summary 6
Slide 7: Thorough Process led by Experienced and Independent Special Committee
Thorough Process led by Experienced and Independent Special Committee Donald DeCarlo Chairman of Special Committee • Former Chairman of the Board of Commissioners of the New York State Insurance Fund • Former general counsel at The Travelers Group • Former managing partner at Lord, Bissell & Brook,
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, form
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
Slide 10: Process Overview
Process Overview Process was rigorous and objective with the goal of maximizing stockholder value • 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 advisors, and the buyer grou
Slide 11: Key Special Committee Activities and Events
Key Special Committee Activities and Events – Mr. Zyskind advised the Board of Stone Point’s interest in a potential transaction at a meeting of the Board on November 16, 2017 November 16 – – At the meeting, the Board determined to permit Stone Point to conduct due diligence in connection with a pot
Slide 12: Key Special Committee Activities and Events (cont'd)
Key Special Committee Activities and Events (cont’d) 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 D
Slide 13: Key Special Committee Activities and Events (cont'd)
Key Special Committee Activities and Events (cont’d) January 19 – Special Committee appoints Deutsche Bank as financial advisor – Due diligence, including: – review of virtual data room – several discussions with Company CEO, CFO and Deputy CFO regarding business, accounting and financial matters an
Slide 14: Full Range of Strategic Alternatives Considered
Full Range of Strategic Alternatives Considered Scenario Description Potential benefits Considerations – Advantages of being public including – Risks to executing management plan – Continue to execute on the current access to equity capital markets and – Continued pressure from rating agencies, busi
Slide 15: Price Negotiations to Obtain Best Offer
Price Negotiations to Obtain Best Offer $17.50 Total # of price increases: 3 Total increase from initial offer: 10.2% $15.10 $14.00 (2) $13.50 $12.90 $13.00 (1) $12.25 $10.15 Stock price Initial offer Special Committee Revised offer Special Committee Revised offer Special Committee Revised offer pre
Slide 16: Valuation Framework
Valuation Framework Overview of valuation methodologies considered Valuation levers Description / Comments A ‒ Analysis of trading multiples for AmTrust and peers(a) relative to AmTrust Trading valuation ‒ Price / Earnings, Price / Book Value, Price / Tangible Book Value are considered Public tradin
Slide 17: Dividend Discount Analysis
Dividend Discount Analysis ($ in millions except per share data) • Deutsche Bank performed a dividend discount analysis to calculate a range of implied present values of the distributable cash flows (1/1/18 – 12/31/21) and terminal value (as of 12/31/21) • Assumed terminal earnings multiple range of
Slide 18: Precedent Insurance Transactions
Precedent Insurance Transactions Price multiples Final offer premium to Stake Deal size 90-day Ann. date Acquiror Target (% Workers' comp) acquired ($mm) NTM P/E P/B P/TBV 1-day 1-week 1-month VWAP Workers comp 30-Dec-14 Fosun International Meadowbrook (~53%) 100% 433 16.7x 0.95x 1.01x 21.3% 29.1% 4
Slide 19: Precedent Squeeze-Outs
Precedent Squeeze-Outs Insurance companies Final offer premium to Stake Deal size 90-day Ann. date Acquiror Target acquired ($mm) 1-day 1-week 1-month VWAP Squeeze-outs 7-Mar-16 American Financial Group National Interstate 49% 318 43.7% 45.0% 39.5% 29.8% 1-Nov-10 CNA Financial CNA Surety 38% 454 37.
Slide 20: Precedent Squeeze-Outs
Precedent Squeeze-Outs Non-insurance companies Final offer premium to Stake Deal size 90-day Ann. date Acquiror Target acquired ($mm) 1-day 1-week 1-month VWAP 7-May-13 Pioneer Natural Resources Pioneer Southwest Energy 48% 764 56.7% 55.8% 63.7% 65.1% 28-Nov-12 Danfoss A/S Danfoss Power 24% 690 48.6
Slide 21: AmTrust Clearly Informed Market Participants About Record Date of April 5, 2018
AmTrust Clearly Informed Market Participants About Record Date of April 5, 2018 • AmTrust’s record date of April 5, 2018 for its upcoming Special Meeting on June 4, 2018 was set and announced in accordance with applicable NASDAQ rules and law. • The Company conducted a broker search 20 business days
Slide 22: Agenda
Agenda AmTrust Overview Evergreen Transaction Result of Robust Process Removes Significant Business Risks and Uncertainties AmTrust Corrects Icahn’s Inaccuracies Summary 22
Slide 23: 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,
Slide 24: AmTrust Trading Performance (Jan/17 – Jan/18)
AmTrust Trading Performance (Jan/17 – Jan/18) 2/27/2017 4/4/2017 Pine announces 2016 2016 10-K filed 9/14/2017 10-K filing delay Announced sale of $30.00 6/5/2017 11/8/2017 policy administration Q3 earnings release; Appointment of new system to NGHC for CFO exhaustion of $200mm Premia adverse develo
Slide 25: AmTrust Sell-Side Analyst Perspectives
AmTrust Sell-Side Analyst Perspectives “We can surmise that AFSI management is concerned that short-term headlines may continue to keep pressure on shares…By taking some of these issues out of the publicly traded limelight, the company can remain focused on evolving to the company into a more mature
Slide 26: 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 27: 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
Slide 28: Agenda
Agenda AmTrust Overview Evergreen Transaction Result of Robust Process Removes Significant Business Risks and Uncertainties AmTrust Corrects Icahn’s Inaccuracies Summary 28
Slide 29: AmTrust Corrects Icahn's Inaccuracies
AmTrust Corrects Icahn’s Inaccuracies Icahn’s valuation analysis(1) is highly flawed • Icahn’s valuation analysis selectively includes only two levers with mistaken assumptions to advance his own self interests. – Deutsche Bank, independent financial advisor to the Special Committee, used a comprehe
Slide 30: AmTrust Corrects Icahn's Inaccuracies (cont'd)
AmTrust Corrects Icahn’s Inaccuracies (cont’d) Icahn’s valuation analysis(1) is highly flawed • Icahn wrongly asserts that AmTrust’s historical loss ratio, combined ratio and premium growth performance is sustainable and ignores AmTrust’s actual recent financial performance and business realities. –
Slide 31: Agenda
Agenda AmTrust Overview Evergreen Transaction Result of Robust Process Removes Significant Business Risks and Uncertainties AmTrust Corrects Icahn’s Inaccuracies Summary 31
Slide 32: Summary
Summary Transaction delivers highest value for stockholders • 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 independent directors of AmTrust,
Slide 33: Proxy solicitor contact information
(A. Amtrust FINANCIAL If you have any questions or need assistance in completing the proxy card, please} contact our solicitor: CKENZIE ERS, INC 1407 Broadway, 27" Floor New York, New York 10018 (212) 929-5500 (Call Collect) Call Toll-Free (800) 322-2885 Email: Amtrust@mackenziepartners.com 33
Slide 34: 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 35: Investor Presentation: AmTrust Financial Services, Inc.
May 2018 Investor Presentation: AmTrust Financial Services, Inc. CONSISTENT VISION DIFFERENTIATED MODEL SUSTAINABLE GROWTH
AmTrust Financial Services — Proxy Contest (May 2018) on 6ix