Fairfax Financial Holdings and Stone Point Capital to acquire Cunningham Lindsey

On October 30, 2007, Fairfax Financial Holdings Limited (TSX: FFH, NYSE: FFH) and Cunningham Lindsey Group Inc. (TSX: LIN) announced that they have entered into an agreement with Trident IV, LP and affiliated entities, which are private equity funds managed by Stone Point Capital LLC.

Pursuant to the agreement, Stone Point will acquire, in a newly formed holding company that will own Cunningham Lindsey's operating businesses, a 51% interest for approximately C$80 million. Fairfax will invest approximately C$30 million and Cunningham Lindsey's senior management and operating companies will also invest. The proceeds from these investments will be used to repay Cunningham Lindsey's C$72.8 million unsecured term loan facility and for working capital. Fairfax Financial Holdings will make a cash offer by way of an amalgamation transaction to acquire all of the outstanding subordinate voting shares of Cunningham Lindsey that it does not currently own. Upon completion of the going-private transaction and investments, Fairfax Financial Holdings will hold an approximately 45% interest in Cunningham Lindsey's operating companies through its 100% ownership of Cunningham Lindsey, and Cunningham Lindsey's senior management and operating companies will hold approximately 4% of these operating companies.

The proposed transaction, expected to close by mid- December, is subject to applicable regulatory approvals and customary closing conditions.

Fairfax Financial Holdings, based in Toronto, is a financial services holding company engaged in property and casualty insurance and reinsurance, investment management and insurance claims management.

Stone Point Capital LLC is a global private equity firm based in Greenwich, Connecticut.

Cunningham Lindsey Group, based in Toronto, is a leading global provider of independent insurance claims services.

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