[Tue 8:36 a.m. June 27]
Nashville-based Graward General Companies Inc., a nonstandard automobile insurance agency, is being closed by its parent, The Seibels Bruce Group Inc. (SBIG), just two years after its acquisition. The closure will result in a charge to Seibels Bruce of $18 million. Goodwill accounts for $14.9 million of the charge, with the rest associated with the write-down of assets, severance and other personnel-related costs.
"Since the acquisition in May of 1998, the Graward operations have performed poorly," Jack Natili, chief operating officer of Seibels Bruce, said in a release. "After two years of continued operating losses, we have decided to discontinue this business. We took a hard look at this operation and determined it could not produce a profit in the foreseeable future."
Columbia, S.C.-based Seibels Bruce said two years ago that it would buy Graward for a tentative price of $10.25 million. At the time, Graward processed $60 million of nonstandard auto insurance annually that was produced by a network of more than 2,000 agents in Tennessee and eight other nearby states. In the four months before it was acquired, Graward lost $25,000 after taxes and profit-sharing on revenue of $7.1 million.
Seibels Bruce said it will work with The Vision Insurance Group LLC here to service certain customers who want to renew their policies.
Seibels Bruce shares settled Monday at $1.19, off from their 52-week high of $5.69 and their all-time high in 1991 of more than $40.
POSTDATA: WARRANTY DEEDS