Heritage acquires insurance firm Zephyr for $134m

Heritage Insurance Holdings, the property/casualty insurance holding company, has completed its previously announced acquisition of Zephyr Acquisition Company (ZAC) and its wholly-owned subsidiary, Zephyr Insurance Company, a specialty insurance provider.

The transaction provides Heritage an immediate presence in the state of Hawaii.

The purchase price of approximately $134 million was $14 million higher than originally projected because Zephyr had higher earnings in the second half of 2015 and the first quarter of 2016, resulting in a corresponding increase in shareholder's equity. The increased purchase price will not impact the goodwill associated with the acquisition, according to Heritage.

As part of Heritage, Zephyr will continue to be based in Hawaii to serve the needs of policyholders within the state. Zephyr celebrated its 15 year anniversary in 2015.

Bruce Lucas, chairman and chief executive officer (CEO), Heritage, said: "The acquisition of Zephyr Insurance is a major step in our diversification process. Zephyr will add over $60 million of voluntary premium to our book and add strategic diversification to our platform.

“Zephyr is an established company with an experienced management team and we are working toward a seamless integration."

Richard Toyama, president and CEO, Zephyr, added: "Zephyr is proud to be known as a prominent and leading residential insurance provider in Hawaii and we look forward to continuing to serve our policyholders with superior customer service. We are excited to team up with Heritage to strengthen our overall product and capabilities."