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FARGO, N.D., Oct. 28, 2019 (GLOBE NEWSWIRE) -- NI Holdings, Inc. (NASDAQ: NODK) today announced the signing of a definitive agreement to purchase 100 percent of the issued and outstanding stock of Westminster American Insurance Company from private shareholders.
Westminster American is headquartered in Owings Mills, Maryland and underwrites commercial multi-peril insurance in the states of Delaware, Georgia, Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina, Virginia, and West Virginia, and the District of Columbia through independent agents. John Scott, Jr., the President of Westminster American, will continue to manage the Westminster American insurance operations along with the current staff and management team. Closing the transaction is expected early next year subject to customary closing conditions, including regulatory approval.
Under the terms of the stock purchase agreement, NI Holdings has agreed to pay Westminster American shareholders $20 million at the closing date, and approximately $6.7 million annually over the three-year period from the date of closing. In addition, in connection with his continued employment after closing, NI Holdings has agreed to pay the President of Westminster American a retention bonus in the aggregate amount of $5 million, payable over the five-year period from the date of closing.
“The acquisition of Westminster American furthers our goal of diversifying our business geographically and by segment, along with growing our insurance operations,” said President & CEO of NI Holdings, Inc., Michael J. Alexander. “John and his team have built an exceptional company and we believe it will continue its profitable growth. Given its past success, Westminster American is a sound insurance underwriter with a wealth of experience in the commercial multi-peril insurance market. We believe that Westminster American will enhance our earnings and provide additional avenues for top-line growth, along with providing long-term stability to our results,” Alexander said. “We believe that Westminster American will fit very well with NI Holdings and provide additional geographic diversification for us.”
Venable LLP served as Westminster American Insurance Company’s legal advisor. Sherman & Company served as NI Holdings’ financial advisor and Dorsey & Whitney LLP was NI Holdings’ legal advisor in this transaction.
About NI Holdings, Inc.
NI Holdings, Inc. is an insurance holding company. The company is a North Dakota business corporation that is the stock holding company of Nodak Insurance Company and became such in connection with the conversion of Nodak Mutual Insurance Company from a mutual to stock form of organization and the creation of a mutual holding company. The conversion was consummated on March 13, 2017. Immediately following the conversion, all of the outstanding shares of common stock of Nodak Insurance Company were issued to Nodak Mutual Group, Inc., which then contributed the shares to NI Holdings in exchange for 55% of the outstanding shares of common stock of NI Holdings. Nodak Insurance Company then became a wholly-owned stock subsidiary of NI Holdings.
Nodak Insurance Company owns American West Insurance Company and Primero Insurance Company. Nodak Insurance Company also manages Battle Creek Mutual Insurance Company and reinsures 100% of the risk on all insurance policies issued by Battle Creek.
NI Holdings’ financial statements are the consolidated financial results of NI Holdings, Direct Auto Insurance Company, and Nodak Insurance, including Nodak Insurance’s subsidiaries American West and Primero, and its affiliate Battle Creek.
Safe Harbor Statement
Some of the statements included in this news release, including but not limited to those pertaining to the consummation of the acquisition of Westminster American, the future growth and profitability of Westminster American, and the impact of the acquisition on the earnings and growth of NI Holdings, Inc., are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations, estimates, and projections about our industry, our management’s beliefs, and certain assumptions made by our management. Actual results could vary materially. Factors that could cause the actual financial results of NI Holdings, Inc. to vary materially include: its ability to successfully close and integrate this acquisition, Westminster American’s ability to continue growing and achieving profitability, and other risks described in the periodic reports that NI Holdings, Inc. files with the Securities and Exchange Commission. You should not place undue reliance on any such forward-looking statements. NI Holdings, Inc. disclaims any obligation to update such statements or to announce publicly the results of any revisions that it may make to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
For a detailed discussion of the risk factors that could affect the actual financial results of NI Holdings, Inc., please refer to the risk factors identified in its SEC reports, including, but not limited to its Annual Report on Form 10-K, as filed with the SEC.
Sherman & Company Served as Financial Advisor to NI Holdings, Inc.