Acquisitions are on the mind of the newly-cashed up Fairfax Financial Holdings Limited as its offering of C$400 million in aggregate principal amount of 4.50% Senior Notes due 2023 reaches completion.
One of the main purposes for the net proceeds of the Offering, according to a company statement, is “to pursue potential acquisition opportunities.”
Since 2006 the company has made over 20 major deals in the insurance space and it shows no signs of slowing down – over the last ten years its book value per share has jumped from US$150 to over US$400. And over the last 30 years it’s shown an impressive compound annual growth rate in book value per share of over 20%.
The holding company’s additional plans for their income from the offering is, according to the same statement, “to increase short-term investments and marketable securities held at the holding company level, to refinance or retire outstanding debt and other corporate obligations of Fairfax and its subsidiaries from time to time.”
CEO and founder of Fairfax, Prem Watsa has been called the Canadian Warren Buffet for his value-investing ethos and has overseen a wide range of acquisitions, from buying
QBE’s Ukrainian business to the acquisition of General Fidelity.
The Senior Notes were offered through a syndicate of dealers led by RBC Dominion Securities Inc. and BMO Nesbitt Burns Inc., which includes CIBC World Markets Inc., National Bank Financial Inc., Scotia Capital Inc., TD Securities Inc., Cormark Securities Inc.,
Desjardins Securities Inc., Canaccord Genuity Corp., Citigroup Global Markets Canada Inc., GMP Securities L.P. and Merrill Lynch Canada Inc. The Senior Notes are unsecured obligations of Fairfax and pay a fixed rate of interest of 4.50% per annum.
Fairfax is engaged in property and casualty insurance and reinsurance and investment management. The company operates primarily through several subsidiaries, including Odyssey Re,
Northbridge Financial, Crum & Forster and Zenith Insurance Company.
