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RICHFIELD, Ohio, July 1, 2010 (GLOBE NEWSWIRE) -- National Interstate Corporation (Nasdaq:NATL) announced today that its principal insurance subsidiary, National Interstate Insurance Company, completed its previously announced acquisition of Vanliner Insurance Company from UniGroup, Inc. Vanliner is a market leader in providing insurance for the moving and storage industry.
The purchase price of $128 million, paid in cash from available funds, represents Vanliner's estimated tangible book value at closing, as well as the value of certain named information technology assets. As previously discussed, the purchase price may be adjusted after closing based on Vanliner's final closing date balance sheet and certain financial guarantees. UniGroup has agreed to provide National Interstate with comprehensive financial guarantees related to the runoff of Vanliner's balance sheet following the close whereby both favorable and unfavorable balance sheet development inures to UniGroup. National Interstate does not expect the transaction to have a material effect on 2010 earnings. Beginning in 2011, the acquisition is expected to be accretive to earnings and return on shareholders' equity. Vanliner wrote approximately $104 million of gross moving and storage premiums in 2009, representing approximately 58 % of its total business.
In conjunction with the acquisition, National Interstate and UniGroup entered into a five-year agreement under which Vanliner remains the exclusively 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 the entire moving and storage industry.
Dave Michelson, President and Chief Executive Officer of National Interstate commented, "National Interstate and Vanliner have a lot in common which was confirmed by the very smooth process from signing the Purchase Agreement to the closing. Vanliner is an obvious extension of our successful specialty niche business model and we anticipate a quick transition into our business. Our moving and storage customers and business partners will continue to receive uninterrupted, excellent service that they have come to expect from Vanliner over the years."