Medical professional liability insurer ProAssurance Corp. announced Thursday that its previously announced acquisition of monoline workers’ compensation insurer Eastern Insurance Holdings was completed effective Jan. 1, 2014. Eastern’s shareholders approved the transaction at a special meeting on Dec. 27, 2013.
Under terms of a previously announced agreement, Lancaster, Pennsylvania-based Eastern becomes a wholly-owned subsidiary of Birmingham, Alabama-based ProAssurance through an all cash transaction that valued Eastern at $24.50 per share, with a total transaction value of $205 million.
“We believe that Eastern will not only enhance the coverages we can offer, but will help us achieve attractive growth and underwriting profit throughout the insurance cycle,” said ProAssurance’s Chairman and Chief Executive Officer W. Stancil Starnes.
“And while our focus in this transaction will be leveraging Eastern’s long-term position in healthcare workers’ compensation solutions and its proven track record in alternative risk transfer solutions, we also recognize the importance of the product line diversification the transaction will provide for the combined organization,” Starnes said.
Starnes also said ProAssurance expects the transaction to be modestly accretive to 2014 earnings before any one-time transaction related expenses.
Eastern’s President Michael L. Boguski added, “We look forward to continuing to execute the workers’ compensation strategic business plan under the Eastern brand with the support, expertise and financial strength of our new partners at ProAssurance.”
Boguski and the Eastern senior executive team have entered into long-term contracts in conjunction with the transaction. Eastern will continue to operate from its corporate office in Lancaster, Pennsylvania, and will maintain all existing regional and satellite office locations.