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
Financial
Analyst
robert.raber@ambest.com
or
Henry
Witmer, 908-439-2200, ext. 5097
Assistant Vice President
henry.witmer@ambest.com
or
Rachelle
Morrow, 908-439-2200, ext. 5378
Senior Manager, Public
Relations
rachelle.morrow@ambest.com
or
Jim
Peavy, 908-439-2200, ext. 5644
Assistant Vice President,
Public Relations
james.peavy@ambest.com
Source: A.M. Best Co.