BIRMINGHAM, Ala. and LANCASTER, Pa., Sept. 24, 2013 /PRNewswire/ -- ProAssurance Corporation (NYSE: PRA) and Eastern Insurance Holdings, Inc. (NASDAQ: EIHI) announced today that Eastern Insurance Holdings (Eastern) will merge with a newly formed subsidiary of ProAssurance Corporation (ProAssurance) in an all-cash transaction that values Eastern at $24.50 per share. As a result of the merger, Eastern will become a wholly-owned subsidiary of ProAssurance. The transaction, with an aggregate value of approximately $205 million, is expected to close by January 1, 2014.
"This is another important strategic transaction for ProAssurance as we continue to build the insurance platform that will allow us to serve the needs of policyholders and shareholders in the years and decades ahead," said ProAssurance's Chairman and Chief Executive Officer, W. Stancil Starnes. "Eastern is a best-in-class workers' compensation specialist with a proven track record of delivering attractive growth and underwriting profit throughout the insurance cycle. Eastern has a strong, long-term position in healthcare workers' compensation that will allow us to broaden the high quality products we are able to offer our existing customers. Equally important is the product line diversification the transaction will provide for the combined organization. Medical professional liability and workers' compensation are 'long-tailed' lines which are best managed through core competencies that we both share, including disciplined underwriting, proactive risk management strategies, strong claims organizations, and a conservative approach to investing. Finally, we anticipate this transaction will be accretive to our 2014 earnings before any one-time transaction related expenses."The President and Chief Executive Officer of Eastern, Michael Boguski, said, "ProAssurance is the ideal long-term partner for us. They share our vision for profitably growing our workers' compensation business through targeted geographic expansion and value-added relationships with agency partners. ProAssurance and Eastern have well established business models that produce excellent results over changing insurance cycles and economic conditions. We share similar employee cultures built on integrity, innovation and carefully cultivated customer and employee loyalty. We look forward to continuing to execute our strategic plan under the Eastern brand with the support, expertise and financial strength of our new partners at ProAssurance. We are extremely pleased to join the ProAssurance family of companies." Mr. Starnes explained why Eastern proved to be the best way for ProAssurance to broaden its medically focused product lines, "We have evaluated the workers' compensation market for some time and believe that a targeted strategy in this large sector will prove equally attractive for ProAssurance shareholders and policyholders, who will have access to the unmatched expertise of Eastern. We believe Eastern will bring us a high quality insurance organization that understands and operates profitably in this market, has successfully executed an expansion strategy and shares a commitment to excellent customer service. We are positioned to grow in our respective markets and believe Eastern's segregated portfolio cell business and expertise will help expand alternative market opportunities in medical professional liability and workers' compensation for our healthcare customers."