Palisades Buys Proformance Insurance For $70M

Berkeley Heights, N.J.-based Palisades Safety and Insurance Association announced today that it has an agreement to acquire publicly held National Atlantic Holdings Corporation, including its subsidiary, The Proformance Insurance Company, for about $70 million.

Both firms employ about 250 persons. National Atlantic is located in Freehold, N.J. In 2007 National Atlantic reported $179 million in premium written and Palisades had $163 million in premium written.

John Peppas, a spokesman for Palisades, said the company would be paying $6.25 per share to take National Atlantic private and expects to close the deal within four-to-six months.

Palisades Group is the fifth largest personal automobile carrier and second largest independent agency writer of automobile insurance in New Jersey.

Palisade President and Chief Executive Officer Ed Fernandez said in a statement that the merger "will result in a stronger organization that remains exclusively focused on the New Jersey market."

The deal will also provide Palisades and its independent agents the opportunity to expand product offerings beyond private passenger auto. The benefit from the synergies and economies of scale by joining these two companies will lower costs that will be passed on to consumers, Palisades said.

Since its inception in 1992, Palisades Group said it has completed nine consolidation transactions and two acquisitions. "Palisades has a proven track record to work through consolidations with minimal disruption to agents and customers," said Mr. Fernandez.

Palisades said its customer service record is almost unblemished, with only one complaint filed with the Department of Banking and Insurance over the last four years that was found to be valid.

The insurer said it maintains a 97 percent claim satisfaction level due to innovative claim services that include its pioneering Door To Door Valet Claim Service, 24-hour claim reporting and first in the nation mobile claim appraisal service.

"We are a unique company because our exclusive focus is serving New Jersey drivers. The merger with Proformance will strengthen that commitment as we add additional resources, talent and agents," added Mr. Fernandez.

Hal Belodoff, a founder and co-chairman of the Palisades Group said: "We started Palisades fifteen years ago with the belief that a company dedicated to and focused on New Jersey would become successful by providing unparalleled service, innovative products and a network of the best agents to safety-conscious drivers who wanted more from their auto insurance company. This transaction will strengthen Palisades' position as a leading provider of auto insurance in New Jersey."

The merger is subject to regulatory and National Atlantic shareholder approvals. Keefe, Bruyette & Woods Inc. is acting as financial adviser to Palisades in this transaction.