United Insurance Holdings Corp. (UPC Insurance) said it will pay $57 million for Interboro Insurance Co., a New York-based property/casualty insurer licensed to operate in four states and Washington, D.C.
The deal involves both cash and stock and allows for the acquisition of all outstanding Interboro common stock from corporate parent Interboro LLC. UPC Insurance said it will pay $48.5 million in cash at closing, and also issue a $8.5 million promissory note with 6 percent interest designed to mature in 18 months.
UPC will get $55 million of homeowner’s insurance gross written premium volume in New York and South Carolina. All personal auto and other non-homeowners lines of business will stay with Interboro and its subsidiaries, according to the deal announcement.
David Nichols, president and CEO of Interboro, said that the remaining enterprise will continue to service its automobile customers through Maidstone Insurance Co.
Interboro is domiciled in New York. It writes homeowners insurance there, and in South Carolina, through 600 independent brokers. It is also licensed to write business in Alabama, Louisiana and Washington, D.C.
The insurer launched in 1914 and is the oldest insurance company on Long Island.
Interboro was formerly Interboro Mutual, which was placed in rehabilitation by state regulators in 2004. It emerged from insolvency in 2007.
In 2012, Interboro acquired AutoOne, the high-risk personal auto business, of OneBeacon.
St. Petersburg, Florida-based UPC Insurance writes property/casualty insurance in Florida, Georgia, Louisiana, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas, and is licensed to write in Alabama, Connecticut, Delaware, Hawaii, Maryland, Mississippi, New Hampshire, New York and Virginia. UPC Insurance debuted in 1999.
UPC Insurance acquired Family Security Holdings LLC for $9 million early this year. FSH is an insurance holding company with two wholly owned subsidiaries, Family Security Insurance Co., a Hawaii-domiciled P/C insurer authorized in Hawaii and Louisiana, and Family Security Underwriters LLC, a managing general agency.
In 2014, UPC Insurance initiated but then terminated a bid to acquire Sunshine State Insurance Co. (SSIC), a financially-troubled Florida property/casualty insurance company.
Also last year, UPC raised $54.1 million in a public offering.
A final purchase price could vary if Interboro’s GAAP net book value is less then or greater than $40.7 million at the transaction’s closing. Deal closure will depend on all the necessary regulatory approvals.
Source: United Insurance Holdings Corp./UPC Insurance
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