Kemper Corporation has entered into a merger agreement to acquire auto insurer Infinity Property and Casualty Corporation in a cash and stock transaction, valued at approximately $1.4 billion.
The implied total consideration is about $1.3 billion, or $121.01 per Infinity share.
Infinity is a provider of auto insurance focused on serving the specialty, nonstandard segment, and the merger will increase Kemper’s scale in nonstandard auto insurance, gaining Infinity’s $1.4 billion in 2017 direct written premiums.
The combined company will have a more diversified portfolio with approximately $2.2 billion in nonstandard auto insurance premiums.
Joseph Lacher Jr., Kemper’s President and Chief Executive Officer (CEO), said; “This compelling transaction combines two well-known brands with complementary strengths and cultures to form a leader in nonstandard auto insurance, and enhances Kemper’s overall growth opportunities, diversification, financial strength, and ability to serve policyholders.
“We look forward to welcoming the Infinity team to the Kemper family and working together to deliver greater choice to our policyholders through an expanded product offering and deeper relationships with our agent networks, while generating strong returns for our shareholders.”
The exchange ratio for the stock consideration to be issued in the merger is fixed and was determined based on Kemper’s 20-trading day volume weighted average price as of February 12, 2018 of $64.40 and on Kemper’s February 12, 2018 closing stock price of $57.75.
Glen Godwin, Infinity CEO, added; “As part of a larger company, Infinity will have access to the capabilities and resources necessary to drive accelerated growth and better serve our policyholders and partner agents.
“In addition, Infinity shareholders will benefit from immediate and certain value for their shares as well as the opportunity to participate in the significant upside potential of the combined company.”