American Coastal Insurance finalized the sale of its New York-based personal lines subsidiary, Interboro Insurance, to Forza Insurance Holdings for approximately $26.4 million in cash.
The sale is part of American Coastal’s transition toward becoming a focused commercial residential property insurer.
Transaction amount is based on Interboro’s estimated equity under generally accepted accounting principles as of the closing date. Both companies will finalize the purchase price over the next 30 days, reconciling it with Interboro’s actual equity as of April 1.
“The sale of Interboro formally completes our strategic transformation into a specialty insurer focused on underwriting commercial residential property insurance,” said Brad Martz, president and CEO of American Coastal. “All of our capital and human resources are now fully focused on our core business.”
American Coastal insures condominium associations, homeowner associations, and apartment complexes in Florida. The divestiture of Interboro allows the company to streamline operations and reinforce its core business strategy.
Raymond James & Associates served as exclusive financial advisor to American Coastal, while Debevoise & Plimpton LLP provided legal counsel on the transaction. The sale was first announced in November 2023.
In recent financial updates, the company reported that hurricanes Debby, Helene, and Milton are expected to result in $20 million in losses across the third and fourth quarters of 2024.
Of that, $3.8 million was attributed to the third quarter, with $2.4 million retained by subsidiary AmCoastal Insurance Co. and $1.4 million by its captive reinsurer. The losses are not anticipated to breach AmCoastal’s excess-loss reinsurance layers.
Shares of American Coastal Insurance Corp. were trading at $11.37 on the afternoon of April 2, down 1.39% from the previous close.
How will the Interboro sale impact Forza’s growth plans? Let us know what you think.
