Meadowbrook Insurance Group Inc. said it is $15 million short of the $100 million it needs to finance the previously announced acquisition of ProCentury.

The Southfield, Mich.-based insurer announced in late February an agreement with ProCentury Corp. to acquire the underwriter in a combination cash and stock transaction with a total worth of $273 million (see NU Online, Feb. 21).

Meadowbrook said it has financing commitments totaling $85 million to its proposed $100 million senior credit facilities. The carrier said the deal is being arranged by Banc of America Securities LLC. The commitments are from Bank of America, J.P. Morgan Chase Bank and KeyBank. The balance of the financing is expected to be completed from additional lenders in mid-July.

Meadowbrook said the proposed credit facilities include a $65 million term loan facility, which is expected to be fully funded at closing, and a $35 million revolving credit facility, which is expected to be partially funded at closing.

The deal is still expected to be completed during the third quarter of the year, Meadowbrook added.

The company said it intends to utilize approximately $77 million in proceeds from the credit facilities, along with available cash, to finance the cash portion of the merger with ProCentury Corporation.

"We appreciate the commitments we have received to date and are confident we will receive commitments for the remaining $15 million within the expected timeframe," said Meadowbrook President and Chief Executive Officer Robert S. Cubbin in a statement.

He added, "We are pleased with how Banc of America Securities has been managing the process and look forward to finalizing the credit facility within the next several weeks and closing on the merger transaction as soon as all necessary shareholder and regulatory approvals are obtained."

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Meadowbrook $15M Shy For ProCentury Deal

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