National Interstate said that its principal insurance subsidiary, National Interstate Insurance Company has entered into a definitive agreement to acquire Vanliner Insurance Company, a subsidiary of UniGroup and provider insurance for moving and storage industry.
Under the agreement, National Interstate will pay approximately $125m-$135m in cash and UniGroup will provide National Interstate with financial guarantees related to runoff of Vanliner’s balance sheet following the close whereby both favorable and unfavorable balance sheet development inures to UniGroup.
According to National Interstate, beginning in 2011, the acquisition is expected to be accretive to earnings and return on shareholders’ equity. The agreement is expected to close in Q2 2010 subject to customary closing conditions and regulatory approvals.
The company said that at the closing of this agreement, it will enter into a five-year agreement with UniGroup whereby Vanliner will remain endorsed insurance provider for UniGroup’s affiliated Mayflower Transit and United Van Lines moving and storage agents. Vanliner will continue to operate from its current offices in Fenton, Missouri, offering insurance solutions to moving and storage industry.
Dave Michelson, president and CEO of National Interstate, said: “We feel that Vanliner is an obvious extension of our successful specialty niche business model, and the moving and storage business complements our existing insurance products. Combining Vanliner’s expertise in the moving and storage industry with National Interstate’s proven underwriting and claims skills will help ensure continued profitable growth for the business.”