American Coastal Insurance completes subsidiary sale

Published 01/04/2025, 21:24
American Coastal Insurance completes subsidiary sale

American Coastal Insurance Corporation (NASDAQ:ACIC), a Delaware-incorporated insurer specializing in fire, marine, and casualty insurance with a market capitalization of $555.34 million, announced today the completion of a strategic transaction involving its subsidiary, Interboro Insurance Company (IIC). According to InvestingPro analysis, ACIC currently trades slightly below its Fair Value, suggesting potential upside for investors. The sale to Forza Insurance Holdings, LLC ("Forza") was finalized on April 1, 2025, with the transaction amounting to $26.4 million.

The consideration for the sale is based on the estimated generally accepted accounting principles (GAAP) equity of IIC as of the closing date. Both parties have agreed to a true-up of this consideration approximately 30 days post-closing, which will be adjusted based on the finalized GAAP equity of IIC. The company maintains a strong financial position, with InvestingPro data showing an impressive EBITDA of $120.13 million and a "GREAT" overall Financial Health Score.

This divestiture was initially disclosed on May 14, 2024, when American Coastal Insurance filed a Current Report on Form 8-K detailing the stock purchase agreement with Forza. The agreement, dated May 9, 2024, outlined the terms of the sale and has been referenced in the latest filing for interested parties.

The completion of this asset disposition marks a significant move for American Coastal Insurance, as it reshapes its business portfolio. The sale proceeds may provide the company with additional liquidity and the potential to focus on its core operations or explore new strategic opportunities. The company has demonstrated strong performance with revenue of $296.66 million and robust revenue growth of 12.2% in the last twelve months. For deeper insights into ACIC’s strategic positioning and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes expert analysis and additional ProTips.

Investors and stakeholders can refer to the stock purchase agreement included in the May 14, 2024, filing for more detailed information regarding the terms of the sale. The company’s SEC filing on April 1, 2025, confirms the official completion of the transaction, undersigned by B. Bradford Martz, President & Chief Executive Officer of American Coastal Insurance Corporation.

This news is based on a press release statement and provides a factual account of the company’s recent business activities without speculation on future implications or industry trends.

In other recent news, American Coastal Insurance Corporation (ACIC) reported its fourth-quarter and full-year 2024 financial results. The company achieved a net income of $4.9 million in the fourth quarter and a 6% increase in pre-tax income for the year. This growth was supported by the launch of a new apartment program in Florida, which contributed significantly to premium growth. ACIC is projecting a net income of $70-90 million for 2025, with a focus on maintaining a combined ratio of 65%.

Additionally, ACIC plans to sell its Interborough unit, which will add $22 million in cash to its financial position. The company has also enhanced its reinsurance protections, including the placement of a new catastrophe bond that provides additional coverage. Analysts have noted the company’s strategic focus on underwriting profitability and operational efficiencies. These developments come amid positive trends in the Florida insurance market, which are expected to support the company’s growth initiatives.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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