Auto Club Insurance Association (ACIA), a Michigan-domiciled reciprocal inter-insurance exchange, has agreed to acquire property and casualty insurer Fremont Michigan InsuraCorp, for $67.7m.
The purchase price equals approximately 1.4 times the GAAP book value of Fremont at 31 December 2010.
Sardar Biglari, chairman and CEO of Biglari Holdings, and holder of approximately 9.7% of the stock of Fremont, has also supported the merger with ACIA.
Certain other stockholders representing approximately 16% of Fremont’s stock, including Mitchell Partners, holder of approximately 9.9% of Fremont’s stock, have signed a shareholders agreement committing to vote their shares in favor of the transaction, subject to the terms of the shareholders agreement.
Fremont president and CEO Richard Dunning said this transaction delivers significant value to our shareholders.
"I see this as a positive transaction for our agents, employees and the Fremont community as ACIA plans to maintain Fremont’s franchise and our Fremont, Michigan, executive offices, and work with Fremont to increase its independent agency distribution in the state of Michigan and surrounding states," Dunning said.
The transaction is subject to approval and is expected to close in the third quarter of 2011.