Stone Point Capital Partners with CEO of AmTrust Financial and Karfunkel Family’s Proposed Acquisition of All Shares of AmTrust Financial


Stone Point has engaged Skadden, Arps, Slate, Meagher & Flom LLP as its legal advisor and the Karfunkel-Zyskind Family have engaged Paul, Weiss, Rifkind, Wharton & Garrison LLP as their legal advisor in connection with the proposed transaction.

Private equity funds managed by Stone Point Capital LLC (“Stone Point”), together with Barry D. Zyskind, Chairman and CEO of AmTrust Financial Services, Inc. (Nasdaq: AFSI) (“AmTrust”), George Karfunkel and Leah Karfunkel (collectively, the “Karfunkel-Zyskind Family”), have jointly proposed to acquire all of the outstanding shares of common stock of AmTrust that the Karfunkel-Zyskind Family does not already own or control for $12.25 per share in cash, which represents a 20.8% premium over AmTrust’s closing stock price on January 8, 2018.

The Karfunkel-Zyskind Family owns or controls approximately 43% of the outstanding shares of AmTrust common stock.

Stone Point and the Karfunkel-Zyskind Family believe the proposed transaction will provide AmTrust’s common stockholders with immediate liquidity and certainty of value at a significant premium to the current share price while allowing AmTrust to focus on the long term without the emphasis on short-term results.

Stone Point and the Karfunkel-Zyskind Family expect that a special committee of independent directors of the AmTrust board of directors will consider the proposed transaction and make a recommendation to the AmTrust board of directors, and that the special committee will retain independent legal and financial advisors to assist in its review of the proposed transaction.

Stone Point and the Karfunkel-Zyskind Family will not proceed with the proposed transaction unless it is approved by the special committee. In addition, the proposed transaction will be subject to a non-waivable condition requiring approval by holders of a majority of AmTrust common shares not owned or controlled by the Karfunkel-Zyskind Family, senior management or their respective affiliates.

The Karfunkel-Zyskind Family have informed AmTrust that they are interested only in acquiring the remaining shares of AmTrust common stock that they do not currently own or control, and have no interest in selling any of the shares they own or control, nor would they expect, in their capacity as stockholders, to vote in favor of any alternative sale, merger or similar transaction involving AmTrust. If the special committee does not recommend, or the stockholders of AmTrust do not approve, the proposed transaction, the Karfunkel-Zyskind Family intend to continue as long-term stockholders of AmTrust.

The Skadden team includes: Financial Institutions M&A partners Todd Freed (Picture) and Jon Hlafter, and associate Patrick Lewis; and Tax partner Jessica Hough (Washington, D.C.). All of the attorneys are based in New York unless otherwise noted.

Involved fees earner: Todd Freed – Skadden Arps Slate Meager & Flom; Jon Hlafter – Skadden Arps Slate Meager & Flom; Patrick Lewis – Skadden Arps Slate Meager & Flom; Jessica Hough – Skadden Arps Slate Meager & Flom;

Law Firms: Skadden Arps Slate Meager & Flom;

Clients: Stone Point Capital LLC;

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Author: Ambrogio Visconti