Arch Capital to acquire RMIC Companies
Old Republic International Corporation has entered into a definitive agreement to sell its mortgage insurance business to Arch Capital Group.
In this transaction, Arch U.S. MI Holdings will acquire Old Republic’s wholly-owned subsidiary, RMIC Companies, and its wholly-owned subsidiaries that together comprise Old Republic’s run-off mortgage insurance business. Consideration is expected to be approximately $140 million. Additionally, Old Republic expects to receive a final 4th quarter dividend of $25 million.
Once the transaction is closed, RMIC’s $1 billion risk in force portfolio will be integrated into Arch MI’s existing US primary mortgage portfolio, which had a RIF of $75.9 billion at September 30, 2023.
The transaction is subject to regulatory approval and is expected to close in the first half of 2024.
“We are pleased to announce this definitive exit from the mortgage insurance business. Since placing this business in run-off in 2011, we have been able to preserve significant value for shareholders and we are grateful for the many years of hard work and dedication of our RMIC associates. In the last five years our run-off reserves have developed favorably, enabling us to receive over $398 million of dividends from these subsidiaries, inclusive of the $25 million expected in the 4th quarter.” – Old Republic president & CEO, Craig R. Smiddy.
“Our ability to leverage the scale of our platform to gain significant expense and capital synergies makes this an attractive financial transaction for Arch. Our teams are experienced and proficient at acquiring and integrating mortgage insurance companies, which we expect will help us quickly maximize the value of this acquisition.” – David Gansberg, CEO of Arch’s Global Mortgage Group.