© Reuters.
PEMBROKE, Bermuda – James River Group (NASDAQ:) Holdings, Ltd. (NASDAQ: JRVR), a Bermuda-based specialty insurance holding company, has initiated legal action against Fleming Intermediate Holdings, a portfolio company of Altamont Capital Partners. The lawsuit, filed in the Supreme Court of New York County’s Commercial Division, seeks to enforce the terms of a previously agreed stock purchase agreement (SPA) for the sale of JRG Reinsurance Company Ltd. (JRG Re).
The complaint, lodged by James River, alleges that Fleming reneged on its commitment to acquire JRG Re, a transaction that was set to conclude following the receipt of all necessary regulatory approvals. According to the filing, Fleming, just hours before the scheduled closing, refused to honor the agreement, failing to attend the closing call and demanding material changes to the transaction terms.
James River has taken all contractually required steps to facilitate the closing of the deal, which was first announced on November 8, 2023. The company is now seeking expedited relief from the court to compel Fleming to complete the purchase by the SPA.
Frank D’Orazio, CEO of James River, expressed the company’s intention to take immediate action to enforce its rights and ensure that Fleming fulfills its obligations. D’Orazio emphasized the company’s confidence in JRG Re and its team, and the measures being undertaken as being in the best interests of James River and its shareholders.
James River Group Holdings operates in two specialty property-casualty insurance segments, with its regulated U.S. insurance subsidiaries holding an A- (Excellent) rating from A.M. Best Company.
This news is based on a press release statement from James River Group Holdings, Ltd.
InvestingPro Insights
In light of the recent legal developments involving James River Group Holdings, Ltd. (NASDAQ: JRVR), investors may find the following InvestingPro data and tips particularly insightful. Despite the uncertainty cast by the litigation with Fleming Intermediate Holdings, the company’s financial metrics offer a mixed picture. James River is currently trading at a significantly reduced price, with the market reflecting this in its low earnings multiple. The adjusted P/E ratio for the last twelve months as of Q4 2023 is 7.01, indicating a potential undervaluation compared to industry peers.
Moreover, James River has demonstrated a commendable track record of maintaining dividend payments, having done so for 10 consecutive years, which is a testament to its financial resilience and commitment to shareholder returns. This is further substantiated by a dividend yield of 2.13% as of early 2024, providing investors with a steady income stream amidst market volatility.
InvestingPro data highlights a robust revenue growth of 22.42% over the last twelve months as of Q4 2023, suggesting that the company is expanding its top-line effectively. Furthermore, the gross profit margin stands at a healthy 38.24%, indicating strong operational efficiency. These metrics, combined with the fact that analysts predict the company will be profitable this year, could offer some reassurance to investors concerned about the impact of the legal dispute on the company’s financial health.
For those interested in a deeper analysis, there are additional InvestingPro Tips available, which provide more nuanced insights into James River’s financial performance and projections. To access these tips and enhance your investment strategy, visit InvestingPro and consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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