ACE Limited announced today that it has entered into a definitive agreement to acquire Penn Millers Holding Corporation for $107 million in cash.
PMHC’s primary insurance subsidiary, Penn Millers Insurance Company, is a well-established underwriter of agri-related insurance in the U.S., providing specialty property and casualty insurance coverages to companies that manufacture, process and distribute agricultural products. Based in Wilkes-Barre, Pa., the company has served the agribusiness market since 1887 and currently operates in 34 states.
“The acquisition of Penn Millers will provide us with an established, specialty niche business that complements our current agricultural market capabilities offered through our Rain and Hail crop insurance and ACE Westchester excess and surplus lines businesses,” said Brian Dowd, Office of the Chairman, ACE Limited. “This acquisition offers us the opportunity to expand our agribusiness presence. We expect that the addition of Penn Millers to the ACE Group will produce results that are immediately accretive to our earnings, return on equity and book value per share. We expect to achieve a return on capital in excess of our target hurdle rate within a short period of time.”
The transaction, which is subject to regulatory approvals, PMHC shareholder approval and other customary closing conditions, is expected to be completed by the end of the first quarter of 2012.
The ACE Group is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited, a component of the S&P 500 stock index, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at: www.acegroup.com.