Alabama-based risk management company ProAssurance Corp said it would be purchasing Eastern Insurance Holdings. The deal, worth USD205 million, was expected to be completed by January 1 next year. The purchase price per share was pegged at USD24.50. This represented a 16% premium to the closing price of Eastern Insurance's shares on Monday.
The deal would enable ProAssurance to enhance its coverage of workers' compensation. ProAssurance's Chairman and Chief Executive Officer, W. Stancil Starnes said this was a strategic transaction for their firm.
"Eastern is a best-in-class workers' compensation specialist with a proven track record of delivering attractive growth and underwriting profit throughout the insurance cycle. Eastern has a strong, long-term position in healthcare workers' compensation that will allow us to broaden the high quality products we are able to offer our existing customers," Starnes added.
Starnes also added that ProAssurance shares the same core competencies with Eastern. This include a disciplined underwriting process, strong claims organization and a conservative investing approach. He expected the transaction to be accretive to their earnings next year.
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