Altaris Capital acquires the insurance group Trean. TIG shares up 90%

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One of the biggest today stock market movers is a little-known insurance provider based in Wayzata, Minnesota. Trean Insurance Group (NASDAQ:TIG) doesn’t usually make national headlines, but its stock is rising on news that the company has reached a definitive agreement to merge with Altaris Capital. The private equity firm is already the company’s largest shareholder, owning about 47% of its stock before the merger. It will pay $6.15 per share to buy the rest in a transaction that values ​​the company at $316 million. News of the merger agreement sent TIG shares up sharply. However, according to a published statement company this morning, once the merger is complete, Trean will be private and will cease trading on Nasdaq.

Let’s take a closer look at the deal and what else investors need to know about it.

What’s going on with TIG stock

After a week of remaining mostly stagnant, TIG stock has surged to an impressive level. As of this writing, it is up more than 92% on the day and looks poised to climb even higher. This unprecedented jump pushed it 102% into the green for the week. TIG started the week trading at less than $3 a share, but since the news of the merger broke, it has reached the $6 mark and is likely to surpass it.

This deal has worked out very well for investors in TIG stock. Altaris’ price represents a “97% premium to Trean’s December 15, 2022 closing price.” With that in mind, it’s easy to see why Trean agreed to the merger. President and CEO Julie Barron had this to say about the deal:

“This agreement with Altaris provides immediate and significant value to all Treano shareholders while positioning the company to continue to focus on strong partnerships, contracting discipline and outstanding claims management to drive long-term growth. As a long-term investor in Altaris, he knows our business well and recognizes the value of our talented team, so we look forward to Altaris further contributions Trean as a private company.”

Barring further complications, the deal is expected to close in the first half of 2023. Barron will remain in her role at the company, while founder Andrew O’Brien will sit on its board of directors.

As of the date of publication, Samuel O’Brient did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer and are the subject of InvestorPlace.com Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for over three years. His areas of expertise include electric vehicle (EV) stocks, green energy and NFTs. O’Brient likes to help everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

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