CONTACT:
Mark J. Morrison
President and Chief Executive Officer
(817) 348-1600
www.hallmarkgrp.com
FORT WORTH, Texas -- September 2, 2008 -- Hallmark Financial Services, Inc. announced today that it has acquired 80% of the outstanding membership interests in Heath XS, LLC and Hardscrabble Data Solutions, LLC (collectively referred to as "Heath Group") for cash consideration of $15 million. The transaction was completed using existing holding company capital.
The Heath Group is a Basking Ridge, New Jersey based underwriting facility that annually produces approximately $50 million of lower hazard, middle market, excess commercial automobile and commercial umbrella risks on both an admitted and non-admitted basis through a well established network of wholesalers throughout the United States. Jeffrey L. Heath, an insurance industry veteran with over 30 years of reinsurance and excess underwriting experience, founded the Heath Group and its predecessor entity in 1991. Philo Smith & Co. acted as exclusive financial advisor and broker to Heath Group on this transaction.
Mark J. Morrison, Chief Executive Officer and President of Hallmark, said, "We are very excited about this acquisition and the superior underwriting and risk assessment expertise within their focused niche that the Heath Group brings to Hallmark. The Heath Group has a market reputation that attracts loyal, top-quality wholesale production sources and a best of class technology platform that drives operating efficiencies and precision underwriting that Hallmark intends to leverage to capture substantial underwriting profits. In addition, the Heath Group continually explores new opportunities with a focus on smaller to middle market business with profitable niches. We expect this acquisition to be immediately accretive to earnings and to build upon synergies that exist with Hallmark's current operations."
Jeffrey L. Heath, President of the Heath Group said, "We are pleased with the agreement we have reached with Hallmark and look forward to a partnership that will provide tremendous value to Hallmark's shareholders."
Hallmark Financial Services, Inc. is an insurance holding company which, through its subsidiaries, engages in the sale of property/casualty insurance products to businesses and individuals. Our business involves marketing, distributing, underwriting and servicing commercial insurance, non-standard personal automobile insurance and general aviation insurance, as well as providing other insurance related services. Our business is geographically concentrated in the south central and northwest regions of the United States, except for our general aviation business which is written on a national basis. The Company is headquartered in Fort Worth, Texas and its common stock is presently listed on NASDAQ under the symbol "HALL."
###
Suite #1000