Press release from Business Wire
A.M. Best Comments on ProAssurance Corporation's Planned Acquisition of Eastern Insurance Holdings, Inc. and Its Subsidiaries
Tuesday, September 24, 2013
A.M. Best Comments on ProAssurance Corporation's Planned Acquisition of Eastern Insurance Holdings, Inc. and Its Subsidiaries16:15 EDT Tuesday, September 24, 2013
OLDWICK, N.J. (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. 5696
Henry Witmer, 908-439-2200, ext. 5097
Assistant Vice President
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations