HALL - Hallmark Financial to sell E&S lines operations to Core Specialty for $59.9M

• Hallmark Financial Services ( NASDAQ: HALL ) sells its excess and surplus lines operations to Core Specialty Insurance Holdings for $40M cash consideration , plus an estimated $19.9M of acquisition costs.
• Hallmark insurance subsidiaries will enter into a quota share reinsurance agreement with a Core Specialty insurance subsidiary to assume 100% of Hallmark’s unearned premium reserves associated with the acquired E&S businesses.
• The transaction includes the acquisition of Hallmark’s agency subsidiary Heath XS, LLC, which does business as Hallmark E&S, and all data, agency relationships, intellectual property, lease arrangements and personnel related to the acquired E&S businesses.
• Also, Core Specialty will not acquire any insurance company entities as part of the transaction, and the transaction excludes loss reserves associated with the acquired E&S businesses, which will be retained by Hallmark.
• HALL shares currently +14.29% to $1.52.

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