The St. Petersburg-based United Insurance Holdings LC. has signed off on a $95 million deal under which the company will merge with the Farmington, Connecticut-based FMG Acquisition Corporation. FMG is expected to change its name to the United Insurance Holdings Corporation once the deal is completed sometime in the second quarter of this year.
Established nine years ago, United insures 73,000 Florida homeowners, representing a $145 million gross premium and $85.4 million in net premiums. In 2007, the company posted $39.6 million in net income, compared to the $17.2 million it reported in the previous year. Under the terms of the deal, United owners will receive a total of $95 million, of which $25 million will be distributed in cash and the rest in 8.75 million shares of stock. United members may also earn another $5 million in cash, based on the management's ability to generate net income in excess of $25 million between July 1, 2008 and June 30, 2009. The same deal holds true if the managers can meet the same criteria during the 2009 calendar year.
United's senior management team will remain in place, with Greg Branch as chairman and Donald Cronin as president and chief executive. Gordon Pratt, chairman and president of FMG, will serve as vice chair. Each company will name three other board members.
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