SOURCE: ProMutual Group

ProMutual Group

June 04, 2009 11:15 ET

ProMutual to Acquire FinCor Holdings

BOSTON, MA--(Marketwire - June 4, 2009) - Medical Professional Mutual Insurance Company ("ProMutual") and FinCor Holdings, Inc. ("FinCor") announced today that they have signed a definitive agreement pursuant to which ProMutual will acquire medical liability insurer and integrated risk management company FinCor and its subsidiaries.

ProMutual, a member of ProMutual Group, a leading provider of medical liability insurance, announced it is acquiring Lansing, Michigan, based FinCor and its five subsidiaries -- MHA Insurance company ("MHAIC"), Washington Casualty Company ("WCC"), FinCor Solutions, Inc., Risk Management and Patient Safety Institute, Inc. ("RM&PSI"), and Capital Risk Solutions SPC. When the acquisition is completed, shareholders will be entitled to receive cash totaling $164 million at close, with two potential additional cash payments which will be determined by future developments and could total in the range of $0 to $73 million.

Completion of the acquisition is subject to certain conditions, which include obtaining regulatory approvals and approval of the plan of merger by the FinCor shareholders. The transaction is expected to close by the end of the third quarter of this year.

Through its MHAIC and WCC subsidiaries, FinCor is one of the leading providers of medical liability insurance in the Midwest and Pacific Northwest, insuring more than 250 hospitals and healthcare facilities and 5,000 physicians in 11 states. RM&PSI is a nationally recognized leader in clinical risk management education, as well as the design and development of patient safety programs for healthcare institutions.

ProMutual Group, one of the top 10 medical liability insurance providers in the country, and one of the largest in the Northeast, said the acquisition reflects the organization's focus on expanding its service footprint both organically and through acquisition.

"FinCor has an outstanding record of growth and a reputation for client-focused insurance and risk management products and services," said Richard W. Brewer, president and CEO of ProMutual Group. "ProMutual is in a strong position of being well-capitalized, and this is an optimal opportunity to move in a strategic direction regarding continued geographic expansion. The acquisition of FinCor not only complements our geographic service area, but will also bolster our strength and presence in the hospital marketplace."

ProMutual stated that it intends to preserve the FinCor-affiliate brands and operate FinCor as an independent subsidiary of ProMutual. The company also noted it plans to retain FinCor's employees.

"We are confident we found a good match with ProMutual. As a mutual insurance company, its policyholders own the company and thus have driven its longstanding commitment to providing responsive coverage and excellent service. This strongly aligns with FinCor's focus and will help take our organization to the next level," said Thomas Dickinson, FinCor's president and CEO. "The acquisition by ProMutual gives us the additional capitalization and resources we were looking for, as FinCor was mapping its future strategic direction. We are looking forward to putting these assets to work for our clients and employees."

Dickinson added, "The acquisition also helps us achieve our commitment to shareholders by providing liquidity for their FinCor equity. Many of our shareholders have been with us from the very origins of the company back in 1976. At a time when there are numerous challenges in the economy, the ability to help our shareholders realize the value of their investment in FinCor is truly significant."

"The synergies represented in this transaction are substantial. The companies have no geographic redundancy, and both bring specialized underwriting strength and clinical risk management experience to their respective markets," said Brewer. "Our organizations share similar cultures and 'service-first' philosophies."

ProMutual has been advised by Keefe, Bruyette & Woods, Inc. and Skadden, Arps, Slate, Meagher & Flom LLP. FinCor has been advised by Raymond James & Associates Inc. and Warner Norcross & Judd LLP.

About ProMutual Group

ProMutual Group is one of the leading providers of medical liability insurance in the Northeast, insuring more than 17,000 physicians, surgeons, and dentists as well as a large number of hospitals, health centers and clinics. It is one of the top 10 medical liability insurance providers in the country based on direct written premium according to Best's Review, August 2008. ProMutual Group has in excess of $2.2 billion in net admitted assets, more than $600 million in policyholder surplus and over $300 million in direct written premium in 2008. ProMutual Group has a Best's Rating of A- (Excellent), and is acknowledged as a leader in providing risk management and claim services to the healthcare community.

Based in Massachusetts, ProMutual Group member companies operate in Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, Pennsylvania, Rhode Island and Vermont. Member company ProSelect Insurance Company also recently became licensed in Virginia. ProMutual Group distributes its products through independent agents. For more information, visit ProMutual Group's web site at www.promutualgroup.com.

About FinCor Holdings

Through its subsidiaries -- FinCor Solutions, The Risk Management and Patient Safety Institute, MHA Insurance Company, Washington Casualty and Capital Risk Solutions, SPC -- FinCor provides industry-leading insurance products and support services including medical liability insurance, workers compensation insurance and clinical risk management solutions to clients nationally. In 2008, FinCor reported annual revenues of $97.2 million, and $17 million in net income which represented an increase of 12 percent over 2007 net income. The company's insurance subsidiary, MHAIC, has maintained a 15-year Best's Rating of A- (Excellent), a mark of the company's financial strength. WCC, FinCor's Pacific Northwest medical liability insurer, which it acquired in 2006, has a Best's Rating of B+ (Good).

With its years of experience focusing on financial loss protection and clinical risk reduction, FinCor has built an outstanding reputation for serving the needs of the healthcare industry. For more information, visit www.fincorholdings.com.

Contact Information

  • Media Contact:
    Nina Akerley
    (617) 946-8665

    FinCor Shareholder Contact:
    Kelly Smallegan-Maas
    (616) 233-0500