Surety Company of the Pacific
Surety Company of the Pacific (SCP), headquartered in Encino, California, is a leading writer of license and permit bonds. Founded in 1969, SCP specializes in license and permit bonds for contractors and is the largest writer of contractor license bonds in California.
The shareholders of SCP were interested in undertaking a transaction as part of their estate planning, but also wanted to identify a strategic buyer that could bring additional capital, infrastructure, and diversification to SCP’s business.
SCP retained KPMG Corporate Finance as its exclusive adviser in the sale process. KPMG Corporate Finance conducted a competitive sale process through which it identified strong interest from multiple strategic buyers. SCP felt that HCC Insurance Holdings, Inc. (HCC) presented the strongest fit for its business and a transaction was completed with HCC in February 2009.
HCC (NYSE: HCC) is a leading international specialty insurance group with offices across the United States and in Bermuda, Ireland, Spain, and the United Kingdom. HCC has assets of US$8.3 billion and is rated AA by both Standard and Poor’s and Fitch Ratings. Following the acquisition, SCP was merged with American Contractors Indemnity Company (ACIC), an HCC subsidiary rated A (Excellent) by A.M. Best Company. The merger is expected to add approximately US$20 million of premium in 2009 to HCC Surety Group, which includes ACIC, Pioneer General Insurance Company, United States Surety Company, and the surety division of U.S. Specialty Insurance Company.