Kingsway Financial Services sells non-standard auto insurance business

TORONTO – Kingsway Financial Services Inc. has signed a deal to sell its non-standard auto insurance business to Premier Holdings, LLC.

Chief executive Larry Swets Jr. says the sale will help the company focus on its extended warranty business.

Under the agreement, Kingsway will sell Mendota Insurance Co., Mendakota Insurance Co. and Mendakota Casualty Co. for a purchase price equal to Mendota’s statutory surplus at June 30.

The company says it expects to take a loss on the sale driven by a writedown of a $7.6 million indefinite lived intangible asset related to Mendota.

Kingsway says it will use the proceeds from the sale to acquire limited liability investments and other investments owned by Mendota.

The transaction is expected to close in the third quarter, subject to regulatory approvals.

Companies in this story: (TSX:KFS)