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Markel Acquires Eagle Construction

Zacks Equity Research

Last week, Markel Ventures Inc., a wholly owned subsidiary of insurance holding company, Markel Corporation (MKL) acquired Virginia based homebuilding company, Eagle Construction and its affiliated entities.

The acquisition of Eagle Construction represents the second investment made by Markel Ventures with the Eagle Companies. Markel has been associated with The Eagle Companies since 2010 through a joint venture –Markel|Eagle Partners. Markel|Eagle Partners is a real estate asset manager in Virginia. The Eagle Companies have decades of experience in construction, development, leasing and asset management in the mid-Atlantic region. The solid performance and prospects of Eagle influenced Markel to acquire the company as part of its investment strategy.

To enhance the long-term financial performance of Markel Corporation, Markel Ventures engages in strategic investments in businesses other than specialty insurers. Markel Ventures acquires these entities without making any changes to its operations and management. With the acquisition, Eagle will become the fourteenth company in Markel Ventures’ portfolio.

To mention one of its recent acquisition endeavors, Markel acquired Alterra Capital Holdings Limited on May 1, 2013, pursuant to the merger agreement on Dec 18, 2012. Markel’s continuous acquisitions and mergers have in a way helped the company improve its revenues. Earlier this month, it reported its second quarter 2013 results that represented a 48.8% revenue improvement year-over-year.

Markel currently carries a Zacks Rank #3 (Hold). Among other insurers EMC Insurance Group Inc. (EMCI), Everest Re Group Ltd (RE) and Global Indemnity Plc (GBLI) carry a favorable Zacks Rank #1 (Strong Buy) and appear impressive.

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