A.M. Best Comments on ProAssurance Corporationâs Planned Acquisition of Eastern Insurance Holdings, Inc. & Its Subsidiar...
24 September 2013 - 10:15PM
Business Wire
A.M. Best Co. has commented that the financial strength,
issuer credit and debt ratings of ProAssurance Corporation
(PRA) (Birmingham, AL) (NYSE:PRA) remain unchanged following the
announcement of PRAâs proposed acquisition of Eastern
Insurance Holdings, Inc. (EIHI) (Lancaster, PA)
(NASDAQ:EIHI).
Pursuant to the agreement, PRA will acquire all of the
outstanding shares of EIHI in an all-cash transaction for $24.50
per share, which equates to a purchase price of approximately $205
million. The transaction is not expected to materially impact
ProAssuranceâs financial leverage (total debt and preferred to
total capital) which, as of June 2013, was 5.6%. The acquisition is
expected to close effective January 1, 2014, and is subject to
regulatory and shareholder approvals.
EIHI is a Pennsylvania-based workersâ compensation insurer,
which has a proven track record of growth and profitability. A
portion of EIHIâs business is offered to medical professionals
and facilities. In addition to traditional insurance, EIHI also
utilizes segregated cell reinsurance captives via Eastern Re
Ltd.
PRA views this as a strategic transaction and plans to retain
all of EIHIâs senior management as well as EIHIâs offices.
While execution risk is always a concern, it is somewhat mitigated
by PRAâs proven track record of smoothly acquiring and
integrating new acquisitions into the organization.
The methodology used in determining these ratings is Bestâs
Credit Rating Methodology, which
provides a comprehensive explanation of A.M. Bestâs rating
process and contains the different rating criteria employed in the
rating process. Bestâs Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2013 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
A.M. Best Co.Robert Raber, 908-439-2200, ext.
5696Financial Analystrobert.raber@ambest.comorHenry
Witmer, 908-439-2200, ext. 5097Assistant Vice
Presidenthenry.witmer@ambest.comorRachelle Morrow,
908-439-2200, ext. 5378Senior Manager, Public
Relationsrachelle.morrow@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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