High River, Alberta – The Western Investment Company of Canada Limited (“WICC” or “Western”) (TSXV:WI) is pleased to provide shareholders with the following update on a number of key developments regarding Fortress Insurance Company (“Fortress”).
- Gross Written Premiums for the first half of 2022 increased 213% to $7.2 million from $2.3 million in 2021. Fortress’ stated target was to grow premiums to $12 million by year end 2022. Based on the first half of the year, they are on track to meet or exceed that goal.
- Fortress has agreed to a strategic partnership with a U.S. based specialty insurance company (“US Insureco”), whose identity will remain confidential until closing of the deal. The partnership includes a minimum equity investment of $1.7 million in Fortress by US Insureco, and a plan to provide Fortress with the resources and expertise to offer specialty surety products in Canadian commercial insurance markets through a comprehensive underwriting and re- insurance agreement. The partnership agreement remains conditional on approval from both the US Insureco and Fortress boards as well as various regulatory approvals. Closing of the deal is expected by September 15, 2022. All facets of the partnership are expected to be operational sometime in the fourth quarter of 2022.
- Fortress intends to complete a $5 million equity issuance including the US Insureco investment, with the balance coming from a small group of value added business partners who will contribute to the continuing growth and development of Fortress. The subscription price of $1.72 for each share in Fortress represents an approximate 100% premium to Fortress’ June 30, 2022 estimated “book value”, and a substantial increase from Western’s original $0.85 per share investment in 2019.
Upon completion of the proposed financing, WICC and its original investment partners will continue to retain a combined controlling interest in Fortress of approximately 60%.
In a message to shareholders, WICC CEO Scott Tannas provided the following commentary:
“Since Western’s investment in 2019, we have helped Fortress establish distribution partnerships that has taken their property insurance business from zero to expected annual sales of $12 million by year end, with continuing momentum. This was step one in the development plan. We are pleased to see Fortress management embark on the important next step, which is to develop a portfolio of niche insurance products. The partnership with US Insureco will propel Fortress into the surety market in a big way and with a financially strong, expert partner.
The $5 million aggregate investment from US Insureco and other value added partners will provide Fortress with capital, capacity, and growth opportunities for years to come.
We will keep shareholders informed of progress and further details as we work with Fortress to obtain all necessary approvals.”
About The Western Investment Company of Canada
Western is a unique publicly traded, private equity company founded by a group of successful Western Canadian business people, and dedicated to building and maintaining ownership in successful Western Canadian companies, and helping them to grow. The company’s shares are traded on the TSX Venture Exchange under the symbol WI. For more information on the company, please visit its website at www.winv.ca.
The Western Investment Company of Canada Limited
President and Chief Executive Officer
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