CNinsure, an insurance agency and brokerage company operating in China, has signed definitive agreements to acquire majority interests in Shanghai Teamhead Insurance Loss Surveyors & Adjusters.
CNinsure had previously announced the signing of a memorandum of understanding with Teamhead for a proposed acquisition in April 2008.
The acquisition reaffirms CNinsure’s plan to combine the networks, expertise and customer bases of Teamhead with those of Fangzhong Insurance Loss Surveyors & Adjusters and Khubon Insurance Loss Surveyors & Adjusters, another two adjusting firms acquired by CNinsure in January 2008 and May 2008 respectively, to form one large claims adjusting service network in China.
Under the terms of the agreements, CNinsure will purchase 51% of the equity interests in Teamhead for RMB24.9 million in total consideration. Meanwhile, CNinsure and the existing shareholders of Teamhead will further capitalize Teamhead with RMB5.1 million and RMB4.9 million respectively, bringing the total registered capital up to RMB19 million.
The agreements also provide that Teamhead’s existing shareholders will transfer some of their equity interests in Teamhead back to CNinsure for nominal value if it fails to meet the performance target in 2008. After the acquisition, the whole management team of Teamhead will stay with the company.
The transaction is expected to close in June 2008 subject to certain consents, authorizations and other customary closing conditions.
Yinan Hu, chairman and CEO of CNinsure, said: Teamhead, Khubon and Fangzhong, which respectively enjoyed competitive edge in providing marine & cargo, vehicle and property insurance survey and claims adjusting services, will provide a solid foundation for CNinsure’s expansion into the claims adjusting sector.