NU Online News Service, Dec. 01, 8:20 a.m. EST
ACE Ltd. has completed its $107 million cash buy of Penn Millers Holding Corp.
Brian Dowd, office of the chairman at ACE Ltd., says in a statement that the purchase “provides us with an established, specialty niche business and offers us the opportunity to expand our substantial agricultural market capabilities offered through our rain and hail crop insurance and ACE Westchester excess and surplus lines business.”
Wilkes-Barre, Pa.-based Penn Millers Insurance Co. operates in 34 states and provides insurance to companies that manufacture, process and distribute agricultural products.
The company will survive as a wholly-owned subsidiary of ACE, says Penn Millers.
Of the 71.1 percent of Penn Millers’ stockholders that voted on the deal, 99.8 percent approved it, says Penn Millers.
Penn Millers reported a net loss of $2.5 million for the 2011 first half, compared to a net loss of $1.5 million during the same time last year.
The company’s second-quarter results (a net loss of $4.4 million) included losses from catastrophes that accounted for about 40 points of its 101.1 second-quarter loss ratio. Penn Millers’ second-quarter combined ratio was 138.7.
When the deal was announced in September, Penn Millers said it had been reviewing strategic alternatives, including a sale, to increase shareholder value, as it continued to be adversely affected by soft-market conditions and weather-related catastrophes.
Penn Millers says the purchase price equates to $20.50 per share in cash.