A.M. Best Comments on ProAssurance Corporation’s Planned Acquisition of Eastern Insurance Holdings, Inc. and Its Subsidiaries
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 PRA’s 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
ProAssurance’s 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 workers’ compensation insurer,
which has a proven track record of growth and profitability. A
portion of EIHI’s 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 EIHI’s senior management as well as EIHI’s offices. While
execution risk is always a concern, it is somewhat mitigated by
PRA’s proven track record of smoothly acquiring and integrating new
acquisitions into the organization.
The methodology used in determining these ratings is Best’s
Credit Rating Methodology, which
provides a comprehensive explanation of A.M. Best’s rating process
and contains the different rating criteria employed in the rating
process. Best’s 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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