Insurance provider Kemper has agreed to acquire Infinity Property and Casualty for $1.4bn.
Infinity offers personal and commercial automobile insurance primarily meeting the requirements and choices of urban and Hispanic customers.
The company's products are offered via a network of about 10,600 independent agencies and brokers
The deal creates a company with increased scale in nonstandard auto insurance and improved ability to serve policyholders.
After completion of the transaction, the senior management team of Infinity will be integrated into the newly-combined organization.
The combined company will have a portfolio with about $2.2bn in nonstandard auto insurance premiums.
Infinity, which employs about 2,300 people, generated $1.4bn in 2017 direct written premiums.
The new company is expected to leverage the operational strengths, platforms, analytical capabilities and demographic insights of the two companies to provide a set of products to its policyholders, while promoting its business growth.
It expects to offer a suite of products ranging from auto, home, life, and health insurance to its customers with greater choice and at competitive prices.
Kemper president and CEO Joseph Lacher said: “This compelling transaction combines two well-known brands with complementary strengths and cultures to form a leader in nonstandard auto insurance, and enhances Kemper’s overall growth opportunities, diversification, financial strength, and ability to serve policyholders.
The transaction is estimated to result in annual pre-tax cost savings of about $55m, and an additional $5m to $10m of pre-tax earnings resulting from the repositioning of Infinity’s investment portfolio.
Infinity CEO Glen Godwin said: “Together, our two companies have a terrific strategic and cultural fit. As part of a larger company, Infinity will have access to the capabilities and resources necessary to drive accelerated growth and better serve our policyholders and partner agents.
“In addition, Infinity shareholders will benefit from immediate and certain value for their shares as well as the opportunity to participate in the significant upside potential of the combined company.”
Image: Kemper to acquire Infinity Property and Casualty. Photo: Courtesy of RK008/FreeDigitalPhotos.net.