Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,516.27 98.74 0.68%
TOPIX 1,173.37 6.78 0.58%
HANG SENG 22,760.24 64.23 0.28%

ProAssurance Completes Medmarc Transaction



                  ProAssurance Completes Medmarc Transaction

PR Newswire

BIRMINGHAM, Ala. and CHANTILLY, Va., Jan. 2, 2013

BIRMINGHAM, Ala. and CHANTILLY, Va., Jan. 2, 2013 /PRNewswire/ -- ProAssurance
Corporation (NYSE: PRA) announced today that its acquisition of Medmarc
Insurance Group (Medmarc) was completed effective January 1, 2013.

(Logo: http://photos.prnewswire.com/prnh/20081024/PROASSURANCELOGO )

Under terms of a previously announced agreement, Medmarc became part of
ProAssurance through a $153.7 million, all cash, sponsored demutualization
that provides Medmarc's Eligible Members with cash payments of $146.2 million
and future policy credits of $7.5 million.

Medmarc is one of the nation's leading underwriters of products liability
insurance for medical technology and life sciences companies, which will
broaden the range of ProAssurance's insurance products to cover the wide
spectrum of healthcare risks required by a rapidly evolving healthcare
environment.

"We are pleased to bring Medmarc's recognized leadership and expertise into
ProAssurance," said Stan Starnes, the Chairman and Chief Executive Officer of
ProAssurance. Starnes added, "The delivery of healthcare is one of the most
dynamic industries in America and Medmarc will greatly enhance our ability to
respond to these new risks. Further, Medmarc's book of legal professional
liability business will expand our existing lawyers' professional liability
line and provide us with additional premium growth opportunities."

Mary Todd Peterson, the President and Chief Executive Officer of Medmarc,
said, "The financial strength of ProAssurance gives Medmarc further
credibility in an industry where we are already recognized as a leader. We see
great opportunity ahead as we combine our deep expertise and creativity in
structuring products liability solutions for medical technology and life
sciences companies, with the balance sheet strength and rating of
ProAssurance."

ProAssurance is funding the transaction with $125 million of secured borrowing
drawn from an existing credit facility. Securities previously considered for
liquidation to fund the transaction are being used to secure the loan and will
yield a rate of return higher than the cost of borrowing over the loan's
projected life.

Ms. Peterson along with the company's other key executives will continue in
their current roles at Medmarc. Medmarc's operations will remain in Chantilly,
Virginia.

The sponsored demutualization converted Medmarc into a non-public stock
company. Simultaneously, under the terms of the Stock Purchase Agreement,
ProAssurance purchased all of Medmarc's newly authorized stock for a cash
price of $153.7 million. Medmarc will use the cash received from ProAssurance
to provide Eligible Members with cash payments and future policy credits as
outlined in the Plan of Conversion. The Plan of Conversion defines an Eligible
Member as a medical technology or life sciences company with an in-force
policy issued by a Medmarc company at any time from December 31, 2010 through
June 30, 2012. Policies with effective dates between June 27, 2012 and June
30, 2012, must have had a quote issued on or before June 26, 2012.

ProAssurance's financial advisor in the transaction is Wells Fargo Securities;
Burr & Forman is serving as legal advisor to ProAssurance. Medmarc's financial
advisor is Sandler O'Neill + Partners, L.P. and its legal advisor is Luse
Gorman Pomerenk & Schick, P.C.

About ProAssurance
ProAssurance Corporation is the nation's largest independently traded
specialty writer of medical professional liability insurance. ProAssurance is
recognized as one of the top performing insurance companies in America by
virtue of its inclusion in the Ward's 50 for the past five years.

ProAssurance is rated "A" (Strong) by Fitch Ratings; ProAssurance Group is
rated "A" (Excellent) by A.M. Best.

Caution Regarding Forward-Looking Statements
Statements in this news release that are not historical fact or that convey
our view of future business, events or trends are specifically identified as
forward-looking statements. Forward-looking statements are based upon our
estimates and anticipation of future events and highlight certain risks and
uncertainties that could cause actual results to vary materially from our
expected results. We expressly claim the safe harbor provisions of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, for any forward-looking statements in this
news release. Forward-looking statements represent our outlook only as of the
date of this news release. Except as required by law or regulation, we do not
undertake and specifically decline any obligation to publicly release the
result of any revisions that may be made to any forward-looking statements to
reflect events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.

Forward-looking statements are generally identified by words such as, but not
limited to, "anticipate," "believe," "estimate," "expect," "hope," "hopeful,"
"intend," "may," "optimistic," "potential," "preliminary," "project,"
"should," "will," and other analogous expressions. When we address topics such
as liquidity and capital requirements, the value of our investments, return on
equity, financial ratios, net income, premiums, losses and loss reserves,
premium rates and retention of current business, competition and market
conditions, the expansion of product lines, the development or acquisition of
business in new geographical areas, the availability of acceptable
reinsurance, actions by regulators and rating agencies, court actions,
legislative actions, payment or performance of obligations under indebtedness,
payment of dividends, and other similar matters, we are making forward-looking
statements.

Risks that could adversely affect the mergers of Medmarc and Independent
Nevada Doctors Insurance Exchange (IND) into ProAssurance and include, but are
not limited to, the following:

  o the businesses of ProAssurance and Medmarc or ProAssurance and IND may not
    be integrated successfully, or such integration may take longer to
    accomplish than expected;
  o the cost savings from either transaction may not be fully realized or may
    take longer to realize than expected;
  o operating costs, customer loss and business disruption following either or
    both transactions, including adverse effects on relationships with
    employees, may be greater than expected.

The following important factors are among those that could affect the actual
outcome of other future events:

  o changes in general economic conditions;
  o our ability to maintain our dividend payments;
  o regulatory, legislative and judicial actions or decisions that could
    affect our business plans or operations;
  o the enactment or repeal of tort reforms;
  o formation or dissolution of state-sponsored medical professional liability
    insurance entities that could remove or add sizable groups of physicians
    from or to the private insurance market;
  o the impact of deflation or inflation;
  o changes in the interest rate environment;
  o changes in U.S. laws or government regulations regarding financial markets
    or market activity that may affect the U.S. economy and our business;
  o changes in the ability of the U.S. government to meet its obligations that
    may affect the U.S. economy and our business;
  o performance of financial markets affecting the fair value of our
    investments or making it difficult to determine the value of our
    investments;
  o changes in accounting policies and practices that may be adopted by our
    regulatory agencies and the Financial Accounting Standards Board, the
    Securities and Exchange Commission, or the Public Company Accounting
    Oversight Board;
  o changes in laws or government regulations affecting medical professional
    liability insurance or the financial community;
  o the effects of changes in the healthcare delivery system, including but
    not limited to the Patient Protection and Affordable Care Act;
  o consolidation of healthcare providers and entities that are more likely to
    self insure and not purchase medical professional liability insurance;
  o uncertainties inherent in the estimate of loss and loss adjustment expense
    reserves and reinsurance;
  o changes in the availability, cost, quality, or collectability of
    insurance/reinsurance;
  o the results of litigation, including pre- or post-trial motions, trials
    and/or appeals we undertake;
  o allegation of bad faith which may arise from our handling of any
    particular claim, including failure to settle;
  o loss of independent agents;
  o changes in our organization, compensation and benefit plans;
  o our ability to retain and recruit senior management;
  o our ability to achieve continued growth through expansion into other
    states or through acquisitions or business combinations;
  o changes to the ratings assigned by rating agencies to our insurance
    subsidiaries, individually or as a group;
  o provisions in our charter documents, Delaware law and state insurance law
    may impede attempts to replace or remove management or may impede a
    takeover;
  o state insurance restrictions may prohibit assets held by our insurance
    subsidiaries, including cash and investment securities, from being used
    for general corporate purposes;
  o taxing authorities can take exception to our tax positions and cause us to
    incur significant amounts of legal expense and, if our defense is not
    successful, additional tax costs, including interest and penalties;
    insurance market conditions may alter the effectiveness of our current
    business strategy and impact our revenues; and
  o expected benefits from completed and proposed acquisitions may not be
    achieved or may be delayed longer than expected due to business
    disruption; loss of customers, employees and key agents; increased
    operating costs or inability to achieve cost savings; and assumption of
    greater than expected liabilities, among other reasons.

Additional risk factors that may cause outcomes that differ from our
expectations or projections
are described in various documents filed by ProAssurance Corporation with the
Securities and
Exchange Commission, such as current reports on Form 8-K, and regular reports
on Forms 10-Q and 10-K, particularly in "Item 1A, Risk Factors."

SOURCE ProAssurance Corporation

Website: http://www.proassurance.com
Contact: Frank B. O'Neil, Sr. Vice President, Corporate Communications &
Investor Relations, +1-800-282-6242, +1-205-877-4461, foneil@ProAssurance.com;
or Karen M. Murphy, Esq., Sr. Vice President, Risk Services and Marketing,
+1-800-356-1886, +1-703-652-1300, kmurphy@Medmarc.com
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement