Updating THE WESTAIM CORP.

Article Excerpt

THE WESTAIM CORP. $0.71 has completed its purchase of Montreal-based Jevco Insurance Co. from Kingsway Financial Services Inc. (Toronto symbol KFS). Jevco sells insurance to high-risk drivers, as well as owners of motorcycles, snowmobiles and recreational vehicles. Jevco operates in Quebec and Ontario. Westaim paid $264.2 million for Jevco. Most of the money came from the $275 million that Westaim raised by selling 550 million common shares for $0.50 each. That raised the total outstanding to 644.2 million shares. The Alberta Investment Management Corporation (AIMCo) bought $148 million of these new shares. AIMCo, a crown corporation, manages Alberta’s public-sector pension plans and other special funds. Westaim structured the sale to limit AIMCo’s ownership to 40%. Jevco is losing money, but its losses are shrinking. It also faces strong competition from larger insurers. As well, its focus on high-risk drivers adds risk. However, Westaim bought Jevco for roughly 5% less than its book value. Moreover, AIMCo’s involvement should help Jevco expand to western Canada. As…

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