ProAssurance Corporation (NYSE: PRA) announced today that its acquisition of Eastern Insurance Holdings, Inc. (Eastern) was completed effective January 1, 2014. Eastern's shareholders overwhelmingly approved the transaction at a special meeting on December 27, 2013.
Under terms of a previously announced agreement, Eastern becomes a wholly-owned subsidiary of ProAssurance through an all cash transaction that valued Eastern at $24.50 per share with a total transaction value of $205 million.
"With the completion of the Eastern transaction, we have taken a significant step toward our goal of building an insurance platform that will allow us to serve the emerging needs of policyholders and shareholders in the years and decades ahead," said ProAssurance's Chairman and Chief Executive Officer, W. Stancil Starnes. He added, "We are confident that being able to provide our policyholders with a best-in-class workers' compensation solution will make us a more attractive insurance partner. 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. 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." Mr. Starnes also noted that ProAssurance expects the transaction to be modestly accretive to 2014 earnings before any one-time transaction related expenses.
The President of Eastern, Michael L. Boguski, said, "Our Eastern team is extremely pleased to join the ProAssurance family of companies. We share similar corporate cultures built on integrity, innovation and carefully cultivated customer and employee loyalty. 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."
Mr. 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.
Transaction Advisors
ProAssurance Corporation was advised in this transaction by Raymond James & Associates and the law firm of Burr & Forman, LLP. Eastern Insurance Holdings, Inc. was advised by Keefe, Bruyette & Woods, Inc. and the law firm of Stevens & Lee.