The Republic Group of Insurance Companies (Republic), of Dallas, announced that a private investor group has agreed to purchase Republic from Winterthur U.S. Holdings Inc. and certain other subsidiaries of Credit Suisse Group (Winterthur) for $127 million in cash.
Founded in 1903, Republic is a medium-sized provider of property and auto insurance for individuals and commercial insurance for main-street businesses in Texas, Louisiana, New Mexico and Oklahoma. The company, with approximately 400 employees, distributes its products through a network of approximately 700 independent agents as well as through several professionally managed programs. Republic has been owned by Winterthur since 1982.
Fully endorsed by Republic’s management, the acquisition was facilitated by Wand Partners, a private equity firm that specializes in insurance investments. The other sponsoring investors include Banc of America Capital Investors, Greenhill Capital Partners, Brazos Private Equity Partners, 21st Century Group LLC, and Norwest Equity Partners.
Stating that Republic expects the sale to allow the company to continue growing the business lines it already participates in, Republic CEO Bruce Milligan added the company expects to explore other niche product or service ideas, including excess and surplus lines, in the future.
Milligan expressed the company’s commitment to independent agents, commenting that the company distributes all its products through independent agents and views the independent agent as its primary customer.
“I am very excited about this transaction,” Milligan said. “I think having an investor group that’s focused solely on Republic and the uniqueness that the Texas insurance market presents should allow us to reach our full potential as a company.”
He continued, “I think this is great news for our independent agents because a growing and vibrant Republic will be able to provide more products and services in the future than what we’re providing them today.”
“Republic will operate independently under the leadership of Bruce Milligan and his current management team and will continue to focus its activities on Texas and surrounding states,” said Bruce Schnitzer, chairman of Wand Partners. “Our investor group is pleased to have the opportunity to support Republic’s management and provide the capital required to further develop Republic’s market position.”
The transaction, which is subject to regulatory approval, is expected to be completed in the third quarter of 2003.
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