UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of Earliest Event Reported) | August 20, 2010 |
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AmTrust Financial
Services, Inc.
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(Exact name of
registrant as specified in its
charter)
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| Delaware | 001-33143 |
04-3106389
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| (State or other jurisdiction | (Commission | IRS Employer |
| of incorporation) | File Number) | Identification No.) |
| 59 Maiden Lane, 6th Floor, New York, New York | 10038 |
| (Address of principal executive offices) | (Zip Code) |
| Registrant’s telephone number, including area code | (212) 220-7120 |
(Former name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.133-4 (c))
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Item 8.01
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Other
Events.
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On August
20, 2010, AmTrust Financial Services, Inc. (the “Company”), through its
wholly-owned subsidiary AMT Warranty Corp., acquired 100% of the issued and
outstanding capital stock of Warrantech Corporation and its subsidiaries
(“Warrantech”) from WT Acquisition Holdings, LLC for approximately $7.5 million
in cash and an
earnout payment to the sellers of a
minimum of $2.0 million and a maximum and $3.0
million based on
AMT Warranty Corp.’s EBITDA over the three-year period from January 1, 2011
through December 31, 2013. Warrantech is a Bedford, Texas-based
developer, marketer and third party administrator of service contracts and
aftermarket warranty products that largely serves the consumer products and
automotive industries in the U.S. and Canada. As previously disclosed
in the Company’s periodic filings, in February 2007, the Company participated
with H.I.G. Capital, a Miami-based private equity firm, in financing H.I.G.’s
acquisition of Warrantech in a cash merger. This resulted in the
Company receiving a 27% equity interest (in the form of preferred units) in WT
Acquisition Holdings, LLC, the parent company of Warrantech
Corporation.
Simultaneous
with the consummation of this transaction, WT Acquisition Holdings, LLC redeemed
the Company’s preferred units that had represented the Company’s 27% equity
interest in that entity. In addition, as a part of a recapitalization
of AMT Warranty Corp., immediately
following the transaction, the Company contributed its note receivable
from Warrantech in the approximate amount of $24.1 million (senior secured note
due January 31, 2012) to AMT Warranty Corp. in exchange for Series A preferred
stock, par value $0.01 per share (the “Series A Preferred Stock”), of AMT
Warranty Corp. valued at $24.1 million. The Company will also receive
additional shares of Series A Preferred Stock such that the total value of its
100% preferred share ownership in AMT Warranty Corp. is equivalent to $50.7
million. Lastly, pursuant to his employment agreement, Joel San
Antonio, the Chairman of Warrantech, was issued common shares in AMT Warranty
Corp., representing 20% of its issued and outstanding common stock after giving
effect to such stock issuance. Given its preference position, absent
the Company’s waiver, the Company will be paid distributions on its Series A
Preferred Stock before Mr. San Antonio is entitled to any distribution on his
common stock.
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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AmTrust
Financial Services, Inc.
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(Registrant)
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| Date | August 26, 2010 | ||||
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/s/ Stephen Ungar | |||
| Stephen Ungar | |||||
| General Counsel and Secretary | |||||