ProAssurance, a specialty writer of medical professional liability insurance, has entered into an agreement to acquire all the outstanding shares of American Physicians Service Group (APS) in an all-cash transaction.

Texas-based APS is an insurance holding company with subsidiaries that provide medical professional liability insurance for physicians and other healthcare providers.

ProAssurance chairman and CEO Stancil Starnes said that this is an attractive strategic and financial acquisition for ProAssurance.

“APS is the second largest writer of medical professional liability (MPL) insurance in Texas, so we expect this transaction to give ProAssurance a strong market presence in a state that has one of the most stable medical/legal environments in the country,” Starnes said.

“In addition, APS’ growth in Oklahoma and Arkansas complements our long-term commitment to those two markets. Financially, we anticipate this transaction will be accretive to our 2011 earnings, before one-time transaction and any restructuring costs.

The transaction is expected to close by the end of 2010. However, it is subject to regulatory and APS’ shareholders approval.