- Transaction includes marketing services agreement under which ADM and Validus will continue to offer ADM grain marketing services
CHICAGO--(BUSINESS WIRE)--Archer Daniels Midland Company (NYSE: ADM) announced today that it has
reached an agreement to sell its Crop Risk Services (CRS) business to
Validus Holdings, Ltd. (Validus) (NYSE: VR) for $127.5 million, subject
to certain working capital and balance sheet adjustments. The deal
includes a marketing services agreement under which ADM and Validus will
work together to continue to offer a full range of insurance and farmer
marketing products and services to CRS customers.
“We regularly evaluate our portfolio to ensure that our businesses and
assets best fit our strategy to maximize long-term returns,” said Joe
Taets, president of ADM’s Agricultural Services business unit. “As a
result of that ongoing process, we have identified a better strategic
fit for the Crop Risk Services business. In the years since we purchased
ADM CRS, that team has built it out to become a significant market
participant. Equally as important, ADM CRS has become a platform through
which our Grain business is able to offer our farmer partners a wide
array of services that benefit both them and ADM. Now, we’re pleased to
have reached an agreement that benefits ADM on two fronts: it includes a
marketing services agreement that will allow ADM and Validus to work
together to continue to offer customers a full array of crop insurance
products as well as ADM’s grain marketing services, while the sale of
the business gives us the opportunity to redeploy capital as part of our
balanced capital-allocation framework. We are pleased to have found a
buyer in Validus that is committed to running—and growing—the business,
and we look forward to continuing to work with Validus and the CRS sales
team and their customers across the country. This is a good solution for
ADM, our shareholders, the CRS team, and the farmers who are the
foundation of our business.”
Validus—a leading global provider of insurance, reinsurance and
investment services, with over 800 employees and offices in all major
regions worldwide—has committed to keeping the CRS business intact,
including maintaining its operations in Decatur.
Ed Noonan, Validus’ chairman and chief executive officer, stated, “I’m
very pleased to welcome CRS to Validus. CRS is a high quality crop
insurance provider that has achieved excellent growth in recent years.
Validus will benefit from CRS’s commitment to provide superior customer
service to agents and farmers via their leading technology capabilities.
The addition of CRS complements Validus’ existing agriculture book and
participation in this market is a logical step as Validus continues to
expand our presence in U.S. primary specialty lines. We are excited by
the long-term partnership with ADM as this transaction further provides
the unique opportunity of a marketing services agreement with one of the
largest agricultural processors in the world.”
The sale, which is subject to regulatory review, is expected to close in
the first half of 2017. Nearly all ADM CRS employees will transfer with
the CRS business at closing. ADM expects to record a book gain upon
About ADM Crop Risk Services
ADM Crop Risk Services (“CRS”) is a Decatur, Illinois-based primary crop
insurance company. CRS was first established in 1982 as ASI AgriServe
Inc. In 2010, ADM acquired 100 percent of the shares of ASI, and the
company became ADM Crop Risk Services.
CRS aims to provide farmers with affordable crop income protection,
superior service and utmost integrity.
Some of the above statements constitute forward-looking statements.
ADM’s filings with the SEC provide detailed information on such
statements and risks, and should be consulted along with this release.
To the extent permitted under applicable law, ADM assumes no obligation
to update any forward-looking statements.
For more than a century, the people of Archer Daniels Midland Company
(NYSE: ADM) have transformed crops into products that serve the vital
needs of a growing world. Today, we’re one of the world’s largest
agricultural processors and food ingredient providers, with more than
32,300 employees serving customers in more than 160 countries. With a
global value chain that includes 428 crop procurement locations, 280
ingredient manufacturing facilities, 39 innovation centers and the
world’s premier crop transportation network, we connect the harvest to
the home, making products for food, animal feed, industrial and energy
uses. Learn more at www.adm.com.
About Validus Holding, Ltd.
Validus Holdings, Ltd. ("Validus") is a holding company for reinsurance
and insurance operating companies and investment advisors including
Validus Reinsurance, Ltd. (“Validus Re”), Talbot Underwriting Ltd.
(“Talbot”), Western World Insurance Group, Inc. (“Western World”) and
AlphaCat Managers, Ltd. (“AlphaCat”).
Validus Re is a Bermuda based reinsurer focused on treaty reinsurance.
Talbot is a specialty insurance group primarily operating within the
Lloyd's insurance market through Syndicate 1183. Western World is a U.S.
specialty lines insurance company focused on excess and surplus lines.
AlphaCat is a Bermuda based investment adviser managing capital for
third parties and Validus in insurance linked securities and other
property catastrophe and specialty reinsurance investments.
Archer Daniels Midland Company