ProAssurance Corp., headquartered in Birmingham, Ala., and Austin, Texas-based American Physicians Service Group Inc. (APS) announced that ProAssurance plans to acquire all the outstanding shares of APS in an all-cash transaction for $32.50 per share. The transaction is expected to close by year-end.
ProAssurance Chairman and Chief Executive Officer W. Stancil Starnes said the acquisition gives ProAssurance a strong market presence in the medical professional liability insurance market in Texas where APS is the second largest writer.
Starnes added that, “APS’ growth in Oklahoma and Arkansas complements our long-term commitment to those two markets. Financially, we anticipate this transaction will be accretive to our 2011 earnings, before one-time transaction and any restructuring costs.”
APS’ board of directors unanimously approved the merger and resolved to recommend that APS shareholders vote in favor of the transaction. The transaction is subject to customary conditions, including regulatory and APS’ shareholder approval. There is no financing condition to consummate the transaction. Shareholder approval is not required for ProAssurance.
Commenting on the proposed merger, A.M. Best said the financial strength rating of “A” (Excellent) and issuer credit ratings (ICR) of “a” of ProAssurance Group and its members and the ICR of “bbb” of its parent holding company, ProAssurance Corp. remain unchanged.
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