State Farm Insurance headquarters in Bloomington, Illinois. (Ivo Shandor)
A dozen Am Law 100 firms have grabbed roles on a series of transactions announced since the start of 2014 involving the insurance industry, where potential consolidation in the sector this year could produce a bevy of business for transactional lawyers.
On Wednesday, Bloomington, Ill.–based State Farm Mutual Automobile Insurance Company, the largest home and auto insurer in the U.S., announced it would sell its Canadian unit to the Desjardins Group, the largest credit union in Canada.
While the exact terms of the deal were not disclosed, the transaction is valued at roughly $1.5 billion as a result of a trio of investments in newly acquired State Farm Canada to be made by soon-to-be-former parent State Farm, Desjardins and French financial firm Credit Mutuel, according to news reports. The CBC notes the deal will make Levis, Quebec–based Desjardins the second-largest property and casualty insurer in Canada.
Mayer Brown and leading Canadian firm McCarthy Tetrault have taken the lead for Desjardins on the deal, which is expected to close in January 2015. Renaud Coulombe serves as general counsel for Desjardins.
State Farm, whose chief legal officer is Kim Brunner, has turned to Skadden, Arps, Slate, Meagher & Flom and Canadian firm Gowling Lafleur Henderson for counsel on its acquisition north of the border. Skadden M&A partners Todd Freed and Christopher Ulery, finance partner Dwight Yoo, tax partner Jessica Hough and associates Alpa Fedor and Jon Hlafter are leading a team working on the matter for the firm, which has been a longtime legal adviser to State Farm.
Meanwhile, Daytona Beach, Fla.–based insurance agency and brokerage firm Brown & Brown also announced this week that it would expand its flood insurance business through the $602.5 million acquisition of The Wright Insurance Group from private equity firm Aquiline Capital Partners.
Holland & Knight corporate partner Tom McAleavey in Orlando and securities partner Chester Bacheller in Tampa have taken the lead for Brown & Brown on the deal, along with R. Gregory Bailey, an employee benefits partner with Bailey & Lumb. Laurel Grammig, a former Holland & Knight partner, serves as Brown & Brown’s chief compliance and regulatory officer. The insurance agency and brokerage firm’s in-house team working on the deal was led by chief M&A counsel David Lotz, a former Arnall Golden Gregory partner, and counsel Anthony Robinson.
Brown & Brown’s general counsel is general counsel is Robert Lloyd. King & Spalding litigation partner Chilton Varner in Atlanta is an independent member of the board at Brown & Brown, along with Samuel Bell III, a partner at Tallahassee’s Pennington P.A.
Willkie is advising Wright on the deal through capital markets cochair Gregory Astrachan, venture capital chair Jeffrey Poss, corporate partner Sean Ewen, tax partner Christopher Peters, insurance regulatory partner Leah Campbell, employee benefits partner Jordan Messinger, antitrust special counsel Jonathan Konoff and associates Kristen DiCarmine, Christian Ercole, Robert Larimore and Dunia Rkein.
New York–based Aquiline, whose chief compliance officer is attorney Ezra Berger, has had a long relationship with Willkie. Last year the firm helped Aquiline acquire Genworth Financial’s wealth management unit for $412.5 million and the firm also handled Aquiline’s 2012 purchase of a majority stake in data management firm BI-SAM Technologies.
Willkie also had a role on another insurance deal announced last week, as struggling Bermuda-based Tower Group International sold itself for $172.1 million to ACP RE, a reinsurer controlled by New York–based insurance holding company AmTrust Financial Services.
John Schwolsky and Alexander Dye—two Willkie insurance partners who joined the firm in a high-profile lateral move from Dewey & LeBoeuf in early 2012—are advising Tower Group on its sale, according to an SEC filing related to the deal.
Davis Polk & Wardwell and Weil, Gotshal & Manges are representing Tower Group’s financial advisers Bank of America/Merrill Lynch and JPMorgan Chase, respectively, on the proposed transaction. Tower Group’s chairman and CEO Michael Lee is an attorney, as are independent directors Steven Schuster, Robert Smith and Jan Van Gorder. (Smith was once a partner at McGuireWoods.) Former Cozen O’Connor partner Elliot Orol is Tower Group’s general counsel.
Kramer Levin Naftalis & Frankel corporate partners Ernest Wechsler, Howard Spilko and Abbe Dienstag, insurance partner Daniel Rabinowitz, litigation partner Jonathan Wagner, special counsel Marjorie Sheldon and associate Michael Brooks are advising ACP Re on the deal. (Rabinowitz, chair of the New York City Bar Association’s insurance committee, joined Kramer Levin last year from Chadbourne & Parke.)
Another team of lawyers from Edwards Wildman Palmer led by M&A partner Gregory Etherington, tax partner Christopher Flanagan, firm chairman and insurance cochair Alan Levin and associates Zachary Lerner and Julie Mahaney are advising AmTrust and National General Holdings Corp. on the transaction. National General, whose general counsel is Jeffrey Weissmann, will buy Tower Group’s consumer coverage unit, according to news reports.
Former Lord, Bissell & Brook managing partner Donald DeCarlo is director at National General and independent director at AmTrust. Fellow attorneys Jay Miller and Howard Zuckerman serve as independent directors at AmTrust and National General, respectively. AmTrust’s general counsel is Stephen Unger. The sale of Tower Re is expected to close this summer.
On Thursday, RCS Capital, a holding company that invests in a variety of financial services firms, including insurance companies, announced that it would buy Cetera Financial Group from private equity firm Lightyear Capital LLC for $1.15 billion in cash, according to sibling publication GlobeSt.
Simpson Thacher & Bartlett, which along with Willkie Farr & Gallagher advised Lightyear last month on its $265 million buy of RidgeWorth Capital Management from SunTrust Banks, is advising the New York–based private equity firm on its sale of Cetera, the third-largest broker-dealer in the U.S. Simpson M&A partner Caroline Gottschalk, who counseled Lightyear on its $960 million sale of BakerCorp to private equity firm Permira in 2011, is leading a team from the firm working on the matter.
Other Simpson lawyers working on the current deal include M&A partner Elizabeth Cooper, finance partner James Cross, tax partner Gary Mandel, employee benefits partner David Rubinsky, IP transactional partner Lori Lesser, senior insurance counsel Steven DeLott and associates Patricia Adams, Shabarika Ajitkumar, Richard Kim, Jeannine McSweeney, Shih-Chi Pan, Seojung Park, Marcela Robledo and Nicole Tague. Lori Forlano, a former M&A associate at Paul, Weiss, Rifkind, Wharton & Garrison, serves as Lightyear’s managing director of legal. Cetera’s general counsel is Nina McKenna.
James Tanaka serves as general counsel for New York–based RCS, which last year bought Summit Financial Services and Investor Capital Holdings for a combined $101.5 million. Proskauer Rose advised RCS on both of those transactions and the firm is once again counseling the company on its purchase of Cetera from Lightyear with a group of lawyers led by real estate capital markets coheads Peter Fass and Steven Lichtenfeld.
Rounding out the Proskauer team working on the deal are tax partner Leslie Loffman, employee benefits partner Ira Bogner, financial services cohead Kathy Rocklen, finance senior counsel Rajani Gupta, M&A senior counsel Michael Mano, antitrust special counsel John Ingrassia, tax special counsel Timothy Donovan and associates Stephen Brecher, Michael Ellis, Erin Fogarty, Evan Hudson, Julie Kim and Gregory Oehler.
A special committee of RCS’s board of directors has tapped Duane Morris to advise on the deal, which will help the acquirer expand its retail brokerage business once it closes later this year.