Hub International Limited (TSE: HBG- news) and Kaye Group Inc. (Nasdaq: KAYE- news) announced today that they have completed the merger through which Hub has acquired Kaye. Under the terms of the merger agreement, to which a majority of Kaye shareholders have consented, holders of Kaye Group shares are to receive $14 in cash for each share.
Hub now has over 100 offices throughout Canada and the United States, including Baltimore, Boston, Chicago, Cleveland, Dallas, Denver, New York, California, Connecticut and Rhode Island.
Hub International funded the payment of the merger consideration through a combination of its own cash reserves, the sale to Fairfax Financial Holdings Limited (which currently owns approximately 41% of Hub International's outstanding shares) of US$35 million principal amount of six year 8.50% subordinate convertible debentures (convertible into common shares of Hub International at Cdn$17 per share), the sale to Zurich Insurance Company of Cdn$42.5 million principal amount of five year 8.50% subordinate convertible debentures (convertible into common shares of Hub International at Cdn$17 per share and subject to a call for redemption after three years) and bank facilities.
Martin P. Hughes, Chairman and Chief Executive Officer of Hub International, commenting on the announcement, said, ``We are very pleased to have the fine Kaye organization become part of the Hub family. Kaye's achievements spanning almost 50 years as a property and casualty and benefits broker have been outstanding, and they bring to Hub additional depth of professional talent, innovation and entrepreneurial energy. We expect our combined efforts to produce even greater success.''
Bruce D. Guthart, Chairman, President and Chief Executive Officer of Kaye Group Inc. and the newly appointed President of United States Operations for Hub International Limited, said, ``The merger with Hub is an exceptional opportunity. I expect the staff at Kaye to benefit from their association with our Hub colleagues and to contribute to strengthening Hub's competitive position in the industry. I thank the many people at both companies who have worked so hard to help bring this agreement to a successful and timely conclusion. Our marketing, account management, financial, human resources, information technology and numerous other units have done a commendable job.''
Hub International Limited is an international insurance brokerage that provides a broad range of property, casualty, life and health, employee benefits, investment and risk management products through offices located in Canada and the United States.