Insurance companies enter into definitive agreement
By Terry Troy
Mayfield Village, OH-based Progressive Corporation and Carmel, IN-based Protective Insurance have entered into an agreement under which Progressive will acquire the Indiana-based company for $338 million. The deal will expand Progressive’s Commercial Line Products.
“As a leader in commercial auto insurance, we’re excited to expand our capabilities with the expertise Protective offers in larger fleet and affinity programs and by providing additional product lines for us to add to our portfolio,” says Karen Bailo, president of Commercial Lines for Progressive. “Our Commercial Lines business provides one of our greatest opportunities to expand our addressable market and grow. This move allows us to add products that will help us support larger fleets and brings expertise in workers’ compensation coverage for the transportation industry, which are new areas of business for us and can help us to meet the needs of our commercial customers. We look forward to working with the employees of Protective and appreciate the knowledge they bring.”
The Special Committee of the Board has been focused on what is in the best interest of Protective and its stakeholders and we are pleased to achieve that objective,” said John D. Nichols, Jr., Chair of the Special Committee of Protective’s Board. “This transaction aligns well with the direction of Protective, provides stability and opportunity for growth and will deliver a significant, immediate cash premium to Protective’s shareholders—all of which the Special Committee and the Board believe creates the ideal outcome for Protective. The Board would also like to recognize the Shapiro family for its over 40-year stewardship of Protective.”
“We are excited to announce this agreement with Progressive, which is a milestone in Protective’s history,” said Jeremy Johnson, Protective’s CEO. “With Progressive’s scale and resources, we expect to deliver greater value to our policyholders, while continuing to provide the exceptional service they have come to expect from us. Progressive shares our commitment to excellence in serving customers, and we are confident they are the ideal owner for Protective. Together, we will be able to deliver innovative offerings and superior customer service to even more customers across the country.
“This transaction is truly a testament to the hard work and dedication of our talented team. By combining with Progressive, we expect Protective and its employees will have greater opportunities to grow as part of a larger and more diversified organization.”
Under terms of the deal, Progressive has agreed to acquire all of the outstanding Class A and Class B common shares of Protective for $23.30 per share in cash. The acquisition is expected to close prior to the end of the third quarter of 2021, subject to customary closing conditions, including receipt of certain required regulatory approvals and approval of Protective’s Class A shareholders. Protective’s Board of Directors has unanimously approved the transaction, based on the unanimous recommendation of the Special Committee of the Board. Certain Protective shareholders owning approximately 35% of Protective’s outstanding Class A common stock that had previously entered into a contingent sale agreement terminated their obligations to close the transactions under that agreement and entered into a voting agreement with Protective and Progressive in support of the sale to Progressive.
Progressive plans to maintain Protective’s offices in Carmel, IN and retain Protective’s employees.