Blog Coverage: Biglari Holdings Announces Acquisition of Pacific Specialty Insurance

Upcoming AWS Coverage on Wendy’s Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 30, 2017 / Active Wall St. blog coverage looks at the headline from Biglari Holdings Inc. (NYSE: BH) as the Company and Pacific Specialty Insurance Company announced on May 25, 2017, an agreement, under which Biglari would acquire all the outstanding shares of the parent Company of Pacific Specialty, and its affiliated agency, McGraw Insurance, Inc., from its shareholders Michael J. McGraw and John M. McGraw. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Biglari Holdings’ competitors within the Restaurants space, The Wendy’s Company (NASDAQ: WEN), reported on May 10, 2017, its unaudited results for Q1 2017 which ended on April 02, 2017. AWS will be initiating a research report on Wendy’s in the coming days.

Today, AWS is promoting its blog coverage on BH; touching on WEN. Get all of our free blog coverage and more by clicking on the link below:
http://www.activewallst.com/register/.

Acquisition Details

As per terms of the transaction agreement, Biglari, which owns fast food chain Steak ‘n Shake, Maxim magazine, First Guard Insurance, and restaurant chain Western Sizzlin, will execute this acquisition through its subsidiary, BHIC Inc. The Company will acquire Western Service Contract Corporation, the parent Company of Pacific Specialty, and McGraw Insurance, Inc. for about $299.5 million, under which $24 million will be payable in cash at the closing of the transaction and $275.5 million as deferred payments. Out of these, Biglari has agreed to pay $175.5 million in cash over a period of 10 years and the remaining $100 million would be payable by a promissory note that matures upon the death of Micheal J. McGraw, or in 10 years following closing should his death occur within that time period. As per the agreement the interest rate during his lifetime is set at 6% per annum.

Pacific Specialty is set to benefit from the parent Company’s strength and stability, and the ownership change will not have any material impact on its day-to-day operations, where Pacific Specialty and its affiliated agency will operate independently of Biglari Holdings’ other insurance operations. Pacific Specialty views this agreement as a step to attain new profit milestones and achieve operational efficiency while operating under Biglari’s portfolio. Pacific Specialty currently operates as an admitted insurance firm across all 50 states and the District of Columbia.

Sardar Biglari, Chairman and CEO of Biglari Holdings, said:

“For over 40 years the McGraw family has built an excellent insurance business with a distinguished performance. Mike McGraw will run the company as he has in the past, an essential part of our purchase decision. A family managed business such as the one by the McGraw’s fits well within Biglari Holdings’ collection of businesses. By becoming a constituent company of Biglari Holdings, Pacific Specialty and its affiliated agency will benefit from the parent company’s strength and stability.”

The transaction is subject to customary closing conditions, including regulatory approvals. The Company expects the deal to be completed in Q3 2017.

Earnings results

Biglari Holdings reported on May 05, 2017, its Q1 FY17 results for the period ending March 31, 2017. The Company announced net pre-tax operating earnings of $2.20 million for Q1 FY17, which was lower than $4.69 million for Q1 FY16. The investment partnership loss stood at $24.97 million versus an investment partnership profit of $78.97 for Q1 FY16. The net interest expenses for the period was $2.82 million in Q1 FY17 against $2.92 million for Q1 FY16. Biglari Holdings reported net loss of $15.82 million for Q1 FY17, while it reported net profits of $51.16 million for Q1 FY16.

Stock Performance

On Friday, May 26, 2017, Biglari Holdings’ stock closed the trading session at $389.93, climbing 1.59% from its previous closing price of $383.83. A total volume of 5.19 thousand shares have exchanged hands, which was higher than the 3-month average volume of 4.27 thousand shares. For the last twelve months, the stock has gained 2.22%. Shares of the company have a PE ratio of 14.45 and currently have a market cap of $795.46 million.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”) represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT
For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com
Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street

ReleaseID: 464418