One of today’s biggest stock market movers is a little-known insurance provider based in Wayzata, Minnesota. Trean Insurance Group (NASDAQ:TIG) doesn’t typically make national headlines but its stock is surging on the news that the company has reached a definitive merger agreement with Altaris Capital. The private equity is already the company’s largest shareholder, holding roughly 47% of its pre-merger shares. To acquire the rest, it will pay $6.15 per share in a transaction that values the firm at $316 million. News of the merger agreement has sent TIG stock shooting up. However, according to a statement released by the company this morning, once the merger is complete, Trean will be taken private and will cease to trade on the Nasdaq.
Let’s take a closer look at the deal and what else investors need to know about it.
What’s Happening With TIG Stock
After a week of remaining primarily stagnant, TIG stock has skyrocketed by impressive levels. As of this writing, it is up more than 92% for the day and looks primed to keep climbing higher. This unprecedented surge has pushed it into the green by 102% for the week. TIG began the week trading at less than $3 per share but since news of the merger broke, it has reached the $6 mark and is likely to pass it.
This deal has worked out very well for TIG stock investors. Altaris’ price represents a “97% premium to Trean’s closing price on Dec. 15, 2022.” 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 delivers immediate and substantial value to all stockholders of Trean while positioning the Company to continue its focus on strong partnerships, underwriting discipline and exceptional claims management to drive growth over the long term. As a long-term investor in the Company, Altaris is deeply familiar with our business and recognizes the value of our talented team, and we look forward to Altaris’ continued contributions to Trean as a private company.”
Pending no further complications, the deal is expected to close within the first half of 2023. Barron will remain in her role at the company while founder Andrew O’Brien will be a part of its board.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.